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high-powered money (E5, G2)<br />Currency, bankers' balances at a CENTRAL BANK and other eligible reserve assets of deposit banks. An increase in the supply of this money permits a multiple expansion of bank deposits because of the operation of the MONEY MULTIPLIER, e.g. a central bank in an open market operation buys bonds from the public thereby increasing the amount of cash available to banks.<br /><em>See also:</em> fractional reserve banking

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