Yes, and in fact this happens many times over: Greg gets a loan from the Bank for $5000. Greg gives Stacey the $5000 to buy her car. Stacey deposits the $5000

Yes, and in fact this happens many times over: Greg gets a loan from the Bank for $5000. Greg gives Stacey the $5000 to buy her car. Stacey deposits the $5000 in the bank. Bob gets a loan from the Bank for $4500. Bob deposits this $4500 in his bank account to spend. Mark gets a loan from the Bank for $4000. And it goes on. In the United States: Of less than $11.5 million have no minimum reserve requirement; Between $11.5 million and $71.0 million must have a liquidity ratio of 3%; Exceeding $71.0 million must have a liquidity ratio of 10%. That means mosts Banks only have to retain 10% of their money as cash and can continue to recursively loan out the rest of it.