Asked by Squid Neutral on Apr 25, 2024
Under a 100-percent-reserve banking system, banks do not influence the supply of money.
100-percent-reserve Banking
A banking system in which banks keep the full amount of their depositors' funds in reserve, meaning they do not loan out any of the deposits but instead hold 100% of deposited money.
Money Supply
The total amount of currency and monetary assets within an economy at a specific time.
- Acquire knowledge on the basics of fractional-reserve banking and how it influences the money supply.
Learning Objectives
- Acquire knowledge on the basics of fractional-reserve banking and how it influences the money supply.