<h2>Key Concepts and Summary</h2>
<p>The money multiplier is defined as the quantity of money that the banking system can generate from each $1 of bank reserves. The formula for calculating the multiplier is 1/reserve ratio, where the reserve ratio is the fraction of deposits that the bank wishes to hold as reserves. The quantity of money in an economy and the quantity of credit for loans are inextricably intertwined. Much of the money in an economy is created by the network of banks making loans, people making deposits, and banks making more loans.</p>
<p>Given the macroeconomic dangers of a malfunctioning banking system, <a data-page="133" href="https://app.ulearngo.com/tutorials/monetary-policy-and-bank-regulation/">Monetary Policy and Bank Regulation</a> will discuss government policies for controlling the money supply and for keeping the banking system safe.</p>
<h2>Glossary</h2>
<h3>money multiplier formula</h3>
<p>total money in the economy divided by the original quantity of money, or change in the total money in the economy divided by a change in the original quantity of money</p>

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Key Concepts and Summary

Economics studies social behavior guiding the allocation of scarce resources to meet the unlimited needs and desires of the individual members of a given society, and for the production of goods and services, growth of production and welfare over time, and a great variety of other complex issues of vital concern to society. 

Economics

Discover the fundamentals of money and banking, including barter systems, functions for money, types of currency, the role of banks, and money creation in the economy, among other key concepts and cautions.


Key Concepts and Summary

Key Concepts and Summary

Glossary

money multiplier formula

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