What you’ll learn to do: describe how money is created by lending
![Hand holding two stacks of one-hundred dollar bills.](https://s3-us-west-2.amazonaws.com/courses-images/wp-content/uploads/sites/2043/2015/05/31153719/6355828469_79aa0c06e2_b.jpg)
In this section, you will see how banks can actually create money through loans. Money that is deposited in a bank is lent out, then a portion of that may be re-deposited elsewhere, then that money will be lent out, and that money re-deposited elsewhere, and so on. This process results in an increase of the money supply.