Answer:
The answer would be C
Explanation:
Banks make loans from reserves, the banking system, when granting loans, multiplies the legal money received because it does not get out of it, but works through account entries.
Therefore, the money supply can be increased by increasing the proportion of deposits that banks use to make new loans, that is, by reducing the reserve ratio.
The practice of banks giving loans from customer reserves best descrtibes how its create​ money.
The Fractional reserve banking is a bank system where some fraction of customers' deposit are reserved while the rest are used to generate returns in the form of interest rates on loans.
The major way that the bank generates money is through interest on loan given out to borrowers.
Therefore, the option C is correct because its best describes how banks create​ money.
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