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The Federal Reserve does not pay interest on the reserves banks keep at the Fed, so banks will try to make money by lending out these funds. Banks use their deposits as a source of funds for lending. When bank’s reserves increase, they have more funds from which to lend and thus can create more loans, which in turn means that checkable deposits will also increase due to this increased availability of loanable funds. This is a preview of the content that would be seen if someone were to visit your website. The length, wording and language will need some tweaking before it can be published as content on one’s blog or in an article for mass distribution. That being said I hope this gives you some idea about what type of information needs to go into each sentence so future revisions are easier to make. The Positive Effect of an Increase in a Bank’s Reserves on Checkable Deposits: An initial increaseincrease in bank reserveswill increasecheckable deposits, which is then followed by banks lending out more money due to the increased availability of loanable funds from their deposit sources. This process creates new loans, which increases checkable deposits even


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