Chapter Fourteen: Module Intro -- Money and Banking
In capitalist economies, the banking system plays a vital role in channeling funds from savers to investors. Banks take in deposits, which they lend out as loans. When this activity works smoothly, it facilitates investment and economic growth. In this chapter, we examine how banks operate, we focus on some of the dangers of a fractional reserve system, and we see how banks create money without ever printing even one dollar on the presses.
We recommend that you read the lecture notes, then take the on-line quiz to test your understanding of the material. Finally, read the module summary to review the main points.