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How much money can banks create?
Does this mean that banks can create an unlimited amount of money? The answer is no - that would require them to lend an unlimited amount of money and that is not possible.
Banks use deposits to create new loans but there is an important difference between deposits and loans. When individuals deposit money in a bank, they can withdraw the money whenever they like. A bank, on the other hand, has no right to cancel a loan and get their money back whenever they like. Banks therefore need reserves so that they can deal with large withdrawals. A bank with small reserves will therefore be less inclined to lend money.
Balance of T rade A country's present account reflects a money drain when exports exceed imports. The net distinction in-between the dollar value of a world imports an
Over long spans of time, macroeconomies typically grow, but over short spans there are fluctuations in output and prices known as ____ ?
Over the past month, the 500 customers have downloaded the following number of songs from WalMart's website (obviously, they have had more, but we need to use workable numbers): 13
with the help of a graph, explain factors that may cause a shift in the balance of payments
The total value of loan in an economy is Rs. 400 million and the reserve ratio is 20 per cent. An enhance of Rs. 15 million in the money which the public keeps in commercial ba
Determine the Long-term direct investment flows Long-term direct investment flows are when investors buy physical assets like land or capital equipment in another nation. This
what causes a shift in the balance of payment?
The short-run supply of a certain crop is perfectly inelastic, because it has already been harvested and no more of it can be grown until the next growing season. In order to raise
explain circular flow of income in an open economy
What advantages might a socialist system have in responding to the needs of people struck by an emergency situation like the earthquake that occurred in Haiti in January, 2010?
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