deposition

(noun)

A phase transition in which a gas is converted to solid, without passing though an intermediate liquid phase. It is the reverse process of sublimation.

Related Terms

Examples of deposition in the following topics:

  • Example Transactions Showing How a Bank Can Create Money

    • Suppose a customer now deposits $1,000 in Anderson Bank.
    • Brentwood's deposits now total $10,900.
    • Thus, you can see that total deposits were $20,000 before the initial $1,000 deposit, and are now $21,900 after.
    • Mathematically, the relationship between reserve requirements (rr), deposits, and money creation is given by the deposit multiplier (m).
    • The deposit multiplier is the ratio of the maximum possible change in deposits to the change in reserves.

  • Other Measurements of the Money Supply

    • MB is the total of all physical currency plus Federal Reserve Deposits (special deposits that only banks can have at the Fed).
    • M1: The total amount of M0 (cash/coin) outside of the private banking system plus the amount of demand deposits, travelers checks and other checkable deposits.
    • M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).
    • M3: M2 + all other certificates of deposit (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.
    • It is M2 – time deposits + money market funds.

  • The Money Supply Multipliers

    • Economists examine the proportion of cash (C) to checkable deposits (D) as the currency-deposit ratio (C/D).
    • Currency-deposit ratio equals C / D while the reserves-deposit ratio is R / D.
    • We add a new variable - the time deposit to the checkable deposit ratio.
    • Public determines this ratio by depositing their funds between time deposits, checkable deposits, and currency.
    • Subsequently, we calculate the ratios for currency-deposit, reserves-deposit, and time checkable-deposit in Equations 19, 20, and 21.

  • Multiple Deposit Expansion and Contraction

    • Banking system creates the money supply through multiple deposit expansion.
    • We show the multiple deposit expansion by using an example.
    • Bank must hold 10% of its deposits as required reserves.
    • Bank must hold 10% of its deposits as required reserves.
    • Consequently, checkable deposits would rise by $100,000.

  • Changes in the Monetary Base

    • Total Liabilities = Currency outstanding (C) + deposits by depository institutions (D) +
    • Treasury deposits + Foreign and other deposits + DACI (3)
    • Treasury deposits + Foreign and other deposits + DACI + Capital (4)
    • Treasury deposits – Foreign and other deposits – Capital (6)
    • For example, the Fed has no control over the Treasury deposits, the float (CIPC - DACI), gold certificates, SDRs, and foreign government deposits.

  • The Federal Deposit Insurance Corporation (FDIC)

    • The Federal Deposit Insurance Corporation is an independent agency whose mandate is to maintain stability and public confidence in financial system.
    • The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system by insuring deposits, examining and supervising financial institutions for safety and soundness and consumer protection, and managing receiverships.
    • The FDIC insures more than $7 trillion of deposits in U.S. banks and thrifts—deposits in virtually every bank and thrift in the country .
    • Banks and credit unions are required to comply with regulations.The Federal Deposit Insurance Corporation (FDIC) insures deposit accounts for banks and the National Credit Union Administration for credit unions.
    • The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system.

  • The Reserve Ratio

    • The reserve ratio is the percentage of deposits that a bank is required to hold in reserves, or funds that are not allowed to be loaned.
    • Banks assume responsibility for consumer deposits and make money by loaning out deposited finds.
    • Therefore, banks with relatively higher deposits are able to supply a larger amount of loanable funds.
    • In order to reduce the risk of a panic or "run on bank" from the perception that a bank may not have adequate liquidity to meet depositor access to cash deposits, central banks have adopted policies to ensure that banks use prudent judgement when assessing the amount of deposits to loan.
    • For example, a reserve ratio of 20% will result in 80% of any given initial deposit being loaned out and if the process of loaning is assumed to continue, the maximum increase in money expansion specific to an initial deposit at a 20% reserve ratio will be equal to the reserve multiplier 1/(reserve ratio) x the initial deposit.

  • The Common Financial Instruments

  • Answers to Chapter 11 Questions

    • Do not include the first $1,000 because the person converted a $1,000 of currency into a bank deposit.
    • $\Delta \text{Deposits}=\Delta \text{Reserves} \times \frac{1}{r_r}=-\ 900 \times \frac{1}{0.1} = \ 9,000$
    • Currency-to-deposit ratio represents the portion of money held by the public as currency.
    • Thus, the multiple deposit creation ceased to work.
    • Banks can hold excess reserves while the public influence the currency to deposit ratio.

  • Multiple Investments

    • For instance, you deposit $500 into the bank account every year at 6% interest.
    • We calculate the future value of your bank deposits in Equation 8.
    • We converted a multiple stream investment into a single deposit investment.
    • Withdrawal or deposit determines the sign.
    • A withdrawal is negative, while a deposit is positive.