A single bank can increase the money supply by the increase in its excess reserves times the simple money multiplier.

Name: A single bank can increase the money supply by the increase in its excess reserves times the simple money multiplier.
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Question

Quizplus · Accepted Answer

A single bank can only lend out its excess reserves, but the full effect of the money multiplier requires multiple banks lending and re-depositing money throughout the banking system.

A Single Bank Can Increase the Money Supply by the Increase