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Banks can create an amount of money beyond what they get in deposits, but that’s limited by the fractional reserve system and the amount they hold as deposits (
by wtmt 7y ago
Banks can create an amount of money beyond what they get in deposits, but that’s limited by the fractional reserve system and the amount they hold as deposits (this makes some simple assumptions, but is mostly true). They cannot create an infinite amount of money by themselves (without a central bank’s intervention).