What is the direct impact on the economy when a commercial bank issues new credit?

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An increase in currency exchange valuesA rise in borrowing costsAn expansion of the money supplyGrowth in the actual national income

Explanation

When a commercial bank extends credit, it effectively increases the amount of money circulating in the economy, thereby expanding the money supply. This is the immediate consequence, unlike changes in exchange rates, interest rates, or national income, which may occur indirectly or over time.