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What else can I help you with?
What do the feds want to do to the money supply to encourages bank loans?
increase
Who loans you money?
the Bank
What are the factor affecting money supply?
The factors that affect money supply are the required reserves for bank rates. Money is mostly created by loans, therefore the shadow banking system is the one that creates the loans. The federal banking system does not control the shadow banking system, so therefore there are no reserve requirements.
What are the factors that affect the money supply?
The factors that affect money supply are the required reserves for bank rates. Money is mostly created by loans, therefore the shadow banking system is the one that creates the loans. The federal banking system does not control the shadow banking system, so therefore there are no reserve requirements.
Why was the creation of a national bank so important to the U.S economy?
The national bank controlled the money supply
What are the factor affection supply?
The factors that affect money supply are the required reserves for bank rates. Money is mostly created by loans, therefore the shadow banking system is the one that creates the loans. The federal banking system does not control the shadow banking system, so therefore there are no reserve requirements.
Why can't the central bank control the money supply completely?
The central bank cannot control the money supply completely because it relies on financial institutions and the public's behavior in the economy. For instance, when banks lend money, they create deposits, which expands the money supply beyond the central bank's direct influence. Additionally, factors like consumer confidence, demand for loans, and the velocity of money can vary, affecting the overall money supply in unpredictable ways. These dynamics make it challenging for central banks to exert total control.
What is the immediate effect of her deposit on the money supply?
The immediate effect of her deposit on the money supply is that it increases the reserves of the bank, allowing the bank to lend more money. When she deposits funds, the bank is required to hold a fraction as reserves but can lend out the excess, effectively creating new money through the lending process. This process can lead to a multiplier effect, where the initial deposit results in a greater overall increase in the money supply as loans are made and re-deposited.
What is a bank repo rate?
A bank repo rate is the rate at which a central bank lends money to commercial banks in the event of a shortfall of funds. It is a tool used by central banks to control money supply in the economy. The repo rate influences interest rates for loans and deposits in the banking system.
How can a bank expand the money supply if someone deposits 5000 in a demand deposit in that bank and the bank has to maintain a 5 percent reserve?
the bank will have to reduce their interest rate in order to attract people to make more withdrowals and also contrac loans
Does The Bank of Montreal offer unsecured loans?
No the The Bank of Montreal does not offer unsecured loans. No banks offers unsecured loans then that won't have anyway of knowing if they lent you money.
What products do banks produce?
Bank use money to make money. When you deposit money into your bank a portion of that goes into the vault as a reserve the rest of it is given out as loans. When a bank makes a loan for say a car that money eventually makes it to another bank. You give the money to the dealership then they put it in the bank. Their bank then puts some in the vault as a reserve and lends the rest of it out as loans. So now the same money that belonged to your bank nows belongs to a third party and there are now two loans on the same money. This is how banks make up money.
