Economics (McConnell), 18th Edition

Chapter 32: Money Creation

IN THIS CHAPTER YOU WILL LEARN:

1. Why the U.S. banking system is called a "fractional reserve" system.



2. The distinction between a bank's actual reserves and its required reserves.



3. How a bank can create money through granting loans.



4. About the multiple expansion of loans and money by the entire banking system.



5. What the monetary multiplier is and how to calculate it.