KEY CONCEPTS

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Reserves

100-percent-reserve banking

Balance sheet

Fractional-reserve banking

Financial intermediation

Monetary base

Reserve–deposit ratio

Currency–deposit ratio

Money multiplier

High-powered money

Open-market operations

Deposit-switching

Bank Rate

Deposit insurance

Bank capital

Leverage

Capital requirement

Portfolio theories

Dominated asset

Transactions theories

Baumol–Tobin model

Near money