Banks
____________________
money
by
accepting
deposits
and
making
loans
.
A
deposit
initially
has
no
effect
on
the
money
supply
because
currency
in
circulation
____________________
and
checkable
bank
deposits
____________________
by
the
same
amount
.
A
bank
reduces
its
____________________
by
making
a
loan
.
By
putting
cash
back
into
circulation
by
____________________
,
banks
increase
the
money
supply
.
The
process
of
money
____________________
continues
via
the
money
multiplier
.
In
tracing
out
the
effect
of
a
deposit
,
it
is
assumed
that
the
funds
a
bank
lends
out
____________________
come
back
to
the
banking
system
.
In
reality
,
some
loaned
funds
may
be
held
by
borrowers
in
their
wallets
and
not
deposited
in
a
bank
,
____________________
the
size
of
the
money
multiplier
.
____________________
____________________
are
a
bank's
reserves
over
and
above
the
amount
needed
to
satisfy
the
minimum
reserve
ratio
.
The
____________________
____________________
is
the
factor
by
which
an
initial
increase
in
excess
reserves
increases
checkable
bank
deposits
,
a
component
of
the
money
supply
.
The
monetary
base
is
the
____________________
of
currency
in
circulation
and
the
reserves
held
by
banks
.
____________________
____________________
____________________
is
part
of
both
the
monetary
base
and
the
money
supply
.
Bank
reserves
aren't
part
of
the
____________________
____________________
,
and
checkable
bank
deposits
aren't
part
of
the
____________________
____________________
.
