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21 February, 05:36

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

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  1. 21 February, 08:45
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    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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