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Figure 22-6
Use the two graphs in the diagram to answer the following questions.
-Refer to Figure 22-6. Starting from C and 3, in the short run, an unexpected decrease in money supply growth moves the economy to
Medium of Exchange
This refers to an item that is widely accepted in exchange for goods and services, facilitating trade by averting the inefficiencies of a pure barter system.
Fractional Reserve Banking
A banking system where banks hold a fraction of deposits as reserves and use the rest for lending purposes.
Total Deposits
The sum of all money deposited in a bank by its customers.
Total Reserves
The sum of a bank's deposits held in reserve at a central bank plus its cash on hand, used to satisfy demand for withdrawals or to meet regulatory requirements.
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