Economics (McConnell), AP* Edition, 20th EditionChapter 33:
Money Creation After studying this chapter, you should be able to: LO 33.1 | Discuss why the U.S. banking system is called a "fractional reserve" system. | LO 33.2 | Explain the basics of a bank's balance sheet and the distinction between a bank's actual reserves and its required reserves. | LO 33.3 | Describe how a bank can create money. | LO 33.4 | Describe the multiple expansion of loans and money by the entire banking system. | LO 33.5 | Define the monetary multiplier, explain how to calculate it, and demonstrate its relevance. |
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