Follow the money multiplier
Exercise and reference answers
- Steps
- A deposit lands in the bank
- The CRR slice is set aside
- The rest is lent onward
- The loan returns as deposits
- Credit multiplies, round by round
- Instructions
- Tap the credit-creation steps in order.
Explanation
_Source: syllabus Introductory Macroeconomics, Ch 3 'Money and Banking' (leec103)_