About the Authors
Marina Ibrahim and Erin Emme
Marina and Erin are both high school students at Troy High School. Both Marina and Erin love their AP Economics class and prefer it to any other class. Both of them are 18 years old and have two dogs, one of them being a German Shepard. An interesting fact about Erin is that she is a diver and will go to college to continue her diving career. An interesting fact about Marina is that she is Egyptian and has been to Egypt twice. Thanks for buying our book!
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Preface
Reserve Requirement: the percentage that the Federal Reserve requires banks to save as required reserves
Excess Reserves: the left over from the required reserves banks are allowed to loan out
Required Reserves: the amount of money banks are required to keep in the bank
Money Multiplier: the formula used to determine the required/excess reserves
This is Johnny. He got $100 for his birthday last week and wants to keep it safe.
Johnny takes his money to the bank and gives it to Bobby the Banker.
Bobby the Banker takes the money from Johnny and goes to visit Frank the FED. Frank lives in the Federal Reserve Bank, the central bank of the United States.
The "reserve requirement" is one of the rules that the Federal Reserve Bank has. Frank tells them they have to store some of their money and can not spend it all.
The money that the bank can't spend is the required reserve. The rest of the money is called excess reserve, which is used to make more money.
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About the Authors
Marina Ibrahim and Erin Emme
Marina and Erin are both high school students at Troy High School. Both Marina and Erin love their AP Economics class and prefer it to any other class. Both of them are 18 years old and have two dogs, one of them being a German Shepard. An interesting fact about Erin is that she is a diver and will go to college to continue her diving career. An interesting fact about Marina is that she is Egyptian and has been to Egypt twice. Thanks for buying our book!
.
Preface
Reserve Requirement: the percentage that the Federal Reserve requires banks to save as required reserves
Excess Reserves: the left over from the required reserves banks are allowed to loan out
Required Reserves: the amount of money banks are required to keep in the bank
Money Multiplier: the formula used to determine the required/excess reserves
This is Johnny. He got $100 for his birthday last week and wants to keep it safe.
Johnny takes his money to the bank and gives it to Bobby the Banker.
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