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  2. Multiplier (economics) - Wikipedia

    en.wikipedia.org/wiki/Multiplier_(economics)

    Commercial banks create money, especially under the fractional-reserve banking system used throughout the world. In this system, money is created whenever a bank gives out a new loan. This is because the loan, when drawn on and spent, mostly finishes up as a deposit back in the banking system and is counted as part of money supply.

  3. Money multiplier - Wikipedia

    en.wikipedia.org/wiki/Money_multiplier

    This may be advantageous because it is a simple way of summarising money supply changes, but the use of the identity does not in itself provide a behavioural theory of what determines the money supply. [1] If, however, one additionally assumes that the two ratios C/D and R/D are exogenously determined constants, the equation implies that the ...

  4. Monetary economics - Wikipedia

    en.wikipedia.org/wiki/Monetary_economics

    Monetary economics is the branch of economics that studies the different theories of money: it provides a framework for analyzing money and considers its functions (such as medium of exchange, store of value, and unit of account), and it considers how money can gain acceptance purely because of its convenience as a public good. [1]

  5. Free price system - Wikipedia

    en.wikipedia.org/wiki/Free_price_system

    A free price system or free price mechanism (informally called the price system or the price mechanism) is a mechanism of resource allocation that relies upon prices set by the interchange of supply and demand. The resulting price signals communicated between producers and consumers determine the production and distribution of resources ...

  6. Supply and demand - Wikipedia

    en.wikipedia.org/wiki/Supply_and_demand

    On the other hand, [10] the money supply curve is a horizontal line if the central bank is targeting a fixed interest rate and ignoring the value of the money supply; in this case the money supply curve is perfectly elastic. The demand for money intersects with the money supply to determine the interest rate. [11]

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  8. Money supply - Wikipedia

    en.wikipedia.org/wiki/Money_supply

    In some economics textbooks, the supply-demand equilibrium in the markets for money and reserves is represented by a simple so-called money multiplier relationship between the monetary base of the central bank and the resulting money supply including commercial bank deposits. This is a short-hand simplification which disregards several other ...

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