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Explain what is meant by the saying banks create money (Hint: watch the meaning of the word, it has a double meaning). If the required
- Explain what is meant by the saying banks "create" money (Hint: watch the meaning of the word, it has a double meaning). If the required reserve ratio is 8%, what is the simple deposit multiplier? If we observed that in the real world the actual deposit multiplier was lower than this, what might be some causes?
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