Macroeconomics Theory and PolicyMasoud Anjomshoa1Masoud Anjomshoa1Supply of MoneyMasoud Anjomshoa2Supply of Money: Reserves(R): The portion of deposits that banks have not lent. A bank liabilities include deposits. A bank assets include reserves and outstanding loans.100-percent-reserve banking:A system in which banks hold all deposits as reserves.Fractional-reserve banking:A system in which banks hold a fraction of their deposits as reserves.In fractional-reserve banking systems, banks create money, but they don’t create wealth: Bank loans give borrowers some new money and an equal amount of new debt.
has intentionally blurred sections.
Sign up to view the full version.