Which best describes how the money that individuals have in savings accounts affects the economy?

A. The money in savings accounts is used for daily expenses like food and gas which keep the economy going.

B. The money in savings accounts just sits in the bank and does not have a great impact on the economy.

C. Savings accounts stop inflation by keeping some money out of circulation.

D. Banks can put the money in savings accounts into circulation by loaning it to others.

I think that the answer is C.

It's not B.

Hint: (Shh -- don't tell anybody! Your answers are lurking in your text material, just waiting for you to pounce on them.)

Is it B?

Can you please give me a hit I'm having trouble figuring out this question?

It's C yall

No.

hint*

i believe its d you were close tho

ITS D OR C NOT A OR B OR YO MAMA

I meant Its D not C yall

To determine the correct answer, let's break down the options and discuss each one:

A. The money in savings accounts is used for daily expenses like food and gas which keep the economy going.
This option suggests that money in savings accounts is frequently used for daily expenses, contributing to economic activity. While it is possible that some individuals may withdraw money from their savings for expenses, this is not a primary function of savings accounts. Savings accounts are generally designed for long-term savings and not meant to be used for regular daily expenses.

B. The money in savings accounts just sits in the bank and does not have a great impact on the economy.
This option claims that the money in savings accounts has minimal impact on the economy as it remains idle in the bank. While it is true that savings account funds are not actively circulating in the economy, banks do utilize these deposits to support lending activities, which can stimulate economic growth indirectly.

C. Savings accounts stop inflation by keeping some money out of circulation.
This option suggests that savings accounts help mitigate inflation by keeping some money out of circulation. While it is true that money saved in a savings account is not actively circulating, it is only a small fraction of the total money supply. Additionally, inflation is influenced by a wide range of factors such as government policies, consumer spending, and monetary policies, making savings accounts alone unable to effectively stop inflation.

D. Banks can put the money in savings accounts into circulation by loaning it to others.
This option suggests that banks can utilize the money in savings accounts by lending it to others, thereby putting it into circulation and stimulating the economy. This is the most accurate option. Banks operate on the principle of fractional reserve banking, which allows them to lend out a portion of the deposits they receive. By lending money to borrowers, banks facilitate economic activity, such as businesses investing in equipment, individuals buying homes, or entrepreneurs starting new ventures.

Based on the explanations, the most accurate answer is D. Banks can put the money in savings accounts into circulation by loaning it to others.

Nope.