Macroeconomics, 9/e

Campbell R. McConnell, University of Nebraska, Lincoln
Stanley L. Brue, Pacific Lutheran University
Thomas P. Barbiero, Ryerson University

How Banks Create Money

Chapter Objectives

In this chapter you will learn:

How a single chartered bank can create (or destroy) money through loans to the public.

About the multiple-deposit expansion of the entire chartered banking system.

What the monetary multiplier is and how to calculate it.

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