What is meant by fractional reserve banking

Reference no: EM13173974

What is meant by fractional reserve banking and what are its implications on the money supply. If the reserve requirement is 6% what is the effect on the money supply of a $650 deposit? What would be the effect if the rate is lowered to 4%, or raised to 9%? Why would the federal reserve change these rates?

Reference no: EM13173974

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