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@Katrina_Fights@freeatlantis.com
MEMORY LANE | #Monetary_Policy: #Money_Creation in a #Fractional_Reserve_Banking System |
The NEW #FAITH SYSTEM? |
In this video we illustrate the #process by which #money is #created in a fractional reserve banking system.
Due to the fact that at #any #given_time a bank must only keep a certain #percentage of its total #deposits on #reserve, an #initial_deposit of a certain amount of money will be #multiplied as the #bank_loans_out any excess reserves, whose spending leads to further new deposits and even further loans in the economy.
