If the government requires banks to keep 100 percent of their deposits on reserve, a $1,000 deposit in a checking account would lead to a $100,000 increase in the money supply.
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Q2: Banks create money when they increase demand
Q3: Money functioning as a medium of exchange
Q4: Financial institutions are not very heavily leveraged,
Q5: People continue to value money because they
Q6: When a person pays a loan back
Q7: A reserve requirement of 10% implies a
Q8: Money is a more efficient store of
Q9: For society, more money means more wealth.
Q10: Reserve requirements exist primarily to prevent bank
Q11: The existence of inflation and other possible
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