Concept introduction:
Transaction Deposits: They are deposits that depositors are free to withdraw or use for making payments through cheques, debit cards etc. without any restrictions.
Reserve Ratio: It is the fraction of its total deposits that a depository institution is required to hold as vault cash with the Federal Reserve.
Total Reserves: They are the total reserves held by a depository institution and consist of both required and excess reserves.
Money Multiplier: It is the measure of the total increase in money supply that banks bring about by giving out loans.
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