Modern Money Mechanics

=Modern Money Mechanics=

A Workbook on Bank Reserves and Deposit Expansion


 * Introduction
 * What is Money?
 * What Makes Money Valuable?
 * Who Creates Money?
 * What Limits the Amount of Money Banks Can Create?
 * What Are Bank Reserves?
 * Where Do Bank Reserves Come From?


 * Bank Deposits—How They Expand or Contract
 * How the Multiple Expansion Process Works
 * Deposit Expansion
 * How Much Can Deposits Expand in the Banking System?
 * Expansion through Bank Investments
 * How Open Market Sales Reduce bank Reserves and Deposits
 * Contraction Also Is a Cumulative Process
 * Deposit Contraction


 * Bank Reserves—How They Change
 * Independent Factors Versus Policy Action
 * Factors Changing Reserve Balances—Independent and Policy Actions
 * Changes in the Amount of Currency Held by the Public
 * When Currency Returns to Banks, Reserves Rise
 * Changes in U.S. Treasury Deposits in Federal Reserve Banks
 * Bank Reserves Decline as the Treasury's Deposits at the Reserve Banks Increase
 * Bank Reserves Rise as the Treasury's Deposits at the Reserve Banks Decline
 * Changes in Federal Reserve Float
 * An Increase in Federal Reserve Float Increases Bank Reserves
 * A Decline in Federal Reserve Float Reduces Bank Reserves
 * Changes in Service-Related Balances and Adjustments
 * An Increase in Required Clearing Balances Reduces Reserve Balances
 * Changes in Loans to Depository Institutions