Describe the Different Record-Keeping Systems

question 38

Essay

Describe the different record-keeping systems.

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Definitions:

Money Multiplier

The ratio of the amount of deposits created by banks to the amount of the central bank's monetary base that has been injected into the economy.

100-percent-reserve Banking

A banking system in which banks keep the full amount of their depositors' funds in reserve, meaning they do not loan out any of the deposits but instead hold 100% of deposited money.

Money Supply

The total amount of currency and monetary assets within an economy at a specific time.

Reserve Requirements

Regulations set by central banks determining the minimum amount of reserves that banks must hold against deposits, used to control the money supply.