[简答题]How do the Commercial Banks create the Money

参考答案: One of the distinguishing features of commercial banks that separate them from other non-banking financial institutions is their ability to create money by their lending and investing activities in cooperation with the national central bank. Under the two-tier banking system, commercial bank is a very important link in money supply. The general size of money supply and its structure is directly related to commercial banks’ business activities. As money creation by commercial banks is discussed in Section A, we won’t elaborate on it again here, but only focus on the money supply by the central bank.