Money is created by the banking system at the point in time when banks accept deposits...
Money is created by the banking system at the point in time when banks accept deposits from its customers.
Homework Answers
Money supply are created by the following equation.
Ms=money multiplier *deposit money in the bank
For example if money multiplier is 5 and 1000 are deposited in the bank.
Money supply creation= 5*1000
=5000
It means by depositing 1000 in the bank, then 5000 are created in the economy.
Hence the given statement is true.
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Money is created by the banking system at the point in time when
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Economics question
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