Monetary Policy: Money Creation in a Fractional Reserve Banking System
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YouTubeJason Welker
Monetary Policy: Money Creation in a Fractional Reserve Banking System
In this video we illustrate the process by which money is created in a fractional reserve banking system. Due to the fact that at any given time a bank must only keep a certain percentage of its total deposits on reserve, an initial deposit of a certain amount of money will be multiplied as the bank loans out any excess reserves, whose spending ...
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