A Swiss referendum for global economic stability4 min read . Updated: 05 Jun 2018, 09:19 AM IST
The Swiss National Bank and commercial banks are opposing the referendum proposal. That is a good reason to take the proposal seriously
All students of economics learn about the money multiplier early in their studies. They are taught that banks multiply their initial deposit into assets (loans) after setting aside a small fraction of it as cash reserve. So, the amount of money created is the initial deposit multiplied by the inverse of the reserve fraction.
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