When banks are compared to retail stores, banks are said to “buy” money. What does the term “buy” refer to?

Question

Responses

The bank borrows money, assets, and stocks.
The bank borrows money, assets, and stocks.

The bank purchases bills from the Federal Reserve Bank.
The bank purchases bills from the Federal Reserve Bank.

The bank collateralizes loans.
The bank collateralizes loans.

The bank promised assets.
The bank promised assets.

Answer 1

In the context of comparing banks to retail stores, the term "buy" refers to the way banks obtain money to lend or invest. Among the provided responses, the most accurate interpretation would be:

The bank borrows money, assets, and stocks.

This means that banks acquire funds through various means such as customer deposits, borrowing from other financial institutions, or issuing debt. They "buy" money in the sense that they are obtaining capital that they will then use to provide loans and other financial services.