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How much money can banks create?
Does this mean that banks can create an unlimited amount of money? The answer is no - that would require them to lend an unlimited amount of money and that is not possible.
Banks use deposits to create new loans but there is an important difference between deposits and loans. When individuals deposit money in a bank, they can withdraw the money whenever they like. A bank, on the other hand, has no right to cancel a loan and get their money back whenever they like. Banks therefore need reserves so that they can deal with large withdrawals. A bank with small reserves will therefore be less inclined to lend money.
Which of the following investments has a larger future value: Investment A an $1,000 investment earning 5% per year for 6 years? Or Investment B a %500 investment earning 10% per y
How much will your firm's total revenues (revenues from both products) change if you increase the price of good X by 2 percent?
what is static and dynamic multiplier in keynesian theory?
Bob's Bee is a small boutique honey manufacturer in Texas. Bob's neighbor is Jon's James. The more honey Bob produces, the more jam Jon is able to produce; that is, there is
1. You are managing a breakfast and lunch only restaurant that sells all-inclusive plated meals (i.e. all lunches include any protein or hot foods as well as salads and sides on a
mention and explain four factors that determine the volume of production.
Foreign Direct Investment and Development: In neo-classical economic theory, FDI involves the movement of capital from capital abundant to capital scarce host countries. Mun
when domestic currency becomes more valuable in terms of foreign currency, the domestic currency is said to have
If the U.S. government were willing to convert dollars into gold at a fixed price, then dollars would be a. fiat money. b. commodity money. c. bank money. d. both fiat and
Q. Explain about Household savings? Remember that consumption may refer to observed consumption as well as to demand for consumption. The same is true for 'household savings',
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