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Process of money creation by the …

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Process of money creation by the commercial bank

    • Posted by Harjot Singh 6 years, 3 months ago

    CBSE > Class 12 > Economics
    • 1 answers

    Ankit Chaudhary 6 years, 3 months ago

    Through the process of money creation, commercial banks are able to create credit, which is in far excess of the initial deposits. This process can be better understood by making two assumptions: ... The fraction is called the Legal Reserve Ratio (LRR) and is fixed by the central bank.

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