Economics/ Bank run and the creation of money


Explain what is meant by the saying banks create” money Hint: watch the meaning of the word, it has a double meaning). If the required reserve ratio is 8%, what is the simple deposit multiplier? If we observed that in the real world the actual deposit multiplier was lower than this, what might be some causes?Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%. As a result of Kristy’s deposit show your calculations for all steps in this problem):