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charle [14.2K]
3 years ago
11

What does it mean to say that "banks create money"?

Business
1 answer:
vova2212 [387]3 years ago
8 0
The process wereby banks make loans equal to amount of their excess recerves and create new checkbook money is known as multiple deposit creation each time a bank recieves a deposit it sets aside some of it to meet reserve requirements and may lend an amount equal to the remaing excess reserves 
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