The reason that the commercial banking system can generate a multiple expansion or contraction of the money supply is that

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Commercial banks are required to maintain a fraction of their deposit liabilities as reserves, which means they can use the rest of the deposits to create loans and further increase the money supply through a process called fractional reserve banking. This allows for a multiple expansion of the money supply. Conversely, if banks reduce lending and hold onto more reserves, this can lead to a contraction of the money supply.

The Reason That the Commercial Banking System Can Generate a Multiple