Survey
* Your assessment is very important for improving the work of artificial intelligence, which forms the content of this project
Download Slide 1
Document related concepts
no text concepts found
Transcript
Module 25 Banking and Money Creation KRUGMAN'S MACROECONOMICS for AP* Margaret Ray and David Anderson What you will learn in this Module: • The role of banks in the economy • The reasons for and types of banking regulation • How banks create money The Monetary Role of Banks • More than half of the M1 is currency • The rest is demand deposits What Banks Do •Financial Intermediary •Bank Reserves •T - Account Assets & Liabilities •Reserve Ratio •Required Reserve Ratio The Problem of Bank Runs •Customer Deposits > Bank Reserves •Why does this usually work? •Bank Run •Why? •Bank Failure Bank Regulation •Deposit Insurance •FDIC •Capital Requirements •Reserve Requirements •The Discount Window Determining the Money Supply How Banks Create Money Reserves, Bank Deposits, and the Money Multiplier •“Leaks” •Excess Reserves •rr = reserve ratio •Loan Expansion = Excess Reserves / rr The Money Multiplier in Reality •Monetary Base •Money Multiplier INSERT FIGURE 25.4
Related documents