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Macroeconomics, 9th Canadian Edition
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

Internet Application Questions



1

Go to: http://www.brazosport.cc.tx.us/~econ/arch/bank.html and answer the following questions:
  1. Do the exercise provided by this website on Banking and Money Creation.
  2. Continue to show the second, third, and fourth round effects of money creation set off by Jane Dyer's initial $1000 deposit in One Bank

 
2

Go to: http://www.cba.ca/en/magazine/getArticle.asp?at_id=184 and answer the following questions:
  1. According to the author, why can demand deposits in banks be considered money?
  2. Does the Bank of Canada currently have a required reserve ratio? Explain.
  3. Describe the money creation process that is outlined in the article.

 




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