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Archive for the ‘Monetary Policy’ Category

How do Banks create money in Fractional Reserve Banking?

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I saw a few videos and articles about how banks create money in fractional reserve and disturbed by the whole tone. They showed this as though something illegal or counterintuitive is happening. But, this is not that controversial and the facts were not spelled out properly. How do banks create money actually? We will see some of Economics basics about these.

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Written by econjournal

November 10, 2008 at 9:10 pm