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Macroeconomic Indicators and Policy · Term 2

The Banking System and Money Creation

Understanding the structure of the banking system and how commercial banks create money.

Key Questions

  1. Explain the role of fractional reserve banking in money creation.
  2. Analyze how banks facilitate economic activity through lending.
  3. Calculate the money multiplier and its implications for the money supply.

Ontario Curriculum Expectations

CEE.EE.17.1CEE.EE.17.2
Grade: Grade 12
Subject: Economics
Unit: Macroeconomic Indicators and Policy
Period: Term 2

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