Modern Money Mechanics

Modern Money Mechanics was a booklet published and distributed by the Federal Reserve Bank of Chicago, originally written by Dorothy M. Nichols in May 1961. Described as a workbook on bank reserves and deposit expansion, the text offers a detailed description of the basic process of money creation in a fractional reserve banking system. The approach taken illustrates the changes in bank balance sheets that occur when deposits in banks change as a result of monetary action by the Federal Reserve System.


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