Fractional Reserve System | Bank and Excess Reserves
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How Business Is Made on Instagram: "Banks multiply your deposit through a process called fractional reserve banking. When you deposit money, the bank keeps a fraction of it as reserves and lends out the rest to borrowers. That loaned money eventually gets deposited back into the banking system, creating new deposits and repeating the cycle. This means your initial deposit doesn’t just sit in the bank—it helps generate multiple loans, increasing the total money circulating in the economy. The pro
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How Business Is Made on Instagram: "Banks multiply your d…
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