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Excess Reserves
how much bank can loan out
Required Reserves
how much the bank has to hold
buying Bonds
no required reserves needed, able to be immediately loaned out
money multiplier
1/ rr
demand deposits
required reserves are taken out, number left after is excess reserves able to be loaned out
maxium make/change in money supply
money multiplier * excess reserves
M1
m1 doesn’t change when initially deposited
demand deposit multiplier
demand deposits * money multiplier