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What is fractional reserve banking system

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What is fractional reserve banking system? How does bank create money? Provide a numeric example.What is money multiplier? How it is calculated? Provide a numeric example. What is a monetary policy? How does Federal Reserve controls the money supply? If the reserve ratio is 10%, then how much money 20,000 additional reserve can create? How can Federal Reserve control increasing inflation rate in the economy?

Reference no: EM131281338

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