-Consider Figure 16.3,which shows changes in private inventories.Which of the following (approximate) dates are likely to be periods of an expansion? Given your analysis,inventories are __________.
Definitions:
Banking System
The network of banks and financial institutions that provide financial services to consumers, businesses, and other banks.
Reserve Ratio
The fraction of deposits that a bank must hold in reserve and not lend out, as required by monetary authorities.
Reserve Ratio
The fraction of depositors' balances that banks must have on hand as cash, a requirement determined by the central bank.
Money Multiplier
The mechanism by which the base money supply is expanded through the banking system's ability to lend and create deposits.
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