Tuesday, August 9, 2011

I'm confused about some banking terms. Can you help me so that I don't waste my GSI's life.?

I'm mostly confused about bank reserves. Are they extra cash that the bank stores or are they a portion of deposits that they store aside? When you put a money into a checking account, is that set aside or can the bank withdraw from it to loan to others? What's the difference between capital requirements vs. reserve requirements? Can you explain the monetary base vs. the money supply to me?

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