- Demand Deposits
- Created through the Fractional Reserve System
- Fractional Reserve System
- The process in which banks hold a small portion of their deposits in reserves and they loan out the excess.
- Required Reserves
- Cash that banks keep on hand
- Total Reserves (TR) or Actual Reserves (AR)
*Required Reserves (RR) + Excess Reserves (ER)
- Created through the Fractional Reserve System
- The process in which banks hold a small portion of their deposits in reserves and they loan out the excess.
- Cash that banks keep on hand
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