Sunday, March 27, 2016

Unit 4 – Money & Banking / Monetary Policy (3-27-16)

Ap Macroeconomics Unit 4 - Money Creation and Multiple Deposit Expansion

Part 8

https://www.youtube.com/watch?v=1tUC59pz95I&feature=bf_next&list=PL2CB281D126F65E26&lf=results_video

Overview-
Money has a certain process that it goes into there are two parts they are a multiplier and multiple deposit expansion. Money creation is the governments process to create money through loans. This for example is the RR is 20% and the loan is $500, the total money created is $2500 this is calculated by 1/RR x loans. This is increase is from the Multiple deposit expansion which affects the entire banking system but it is only a potential increase.

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