The money-multiplier process is based on the principle of fractional reserve banking.

Name: The money-multiplier process is based on the principle of fractional reserve banking.
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The money-multiplier process is based on the fact that banks keep only a fraction of the total deposits as reserves, and lend out the rest. This leads to the creation of new deposits and the expansion of the money supply through successive rounds of lending and deposit creation.

The Money-Multiplier Process Is Based on the Principle of Fractional