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Fractional Reserve Banking and the Money Multiplier Made Simple
6:56
YouTubeMarginal Revolution University
Fractional Reserve Banking and the Money Multiplier Made Simple
When you deposit money into a bank, do you know what happens to it? It doesn’t simply sit there. Banks are actually allowed to loan out up to 90% of their deposits. For every $10 that you deposit, only $1 is required to stay put. This practice is known as fractional reserve banking. Now, it’s fairly rare for a bank to only have 10% in ...
544.4K viewsJul 25, 2017
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