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In summary, banks possess the ability to create what is often referred to as money out of thin air. This occurs through the fractional reserve banking system, where only a fraction of deposited funds needs to be held in reserve, allowing a significant portion to be loaned out repeatedly. While this system supports economic growth and facilitates credit availability, it also raises questions about financial stability and the nature of money supply in the economy. Understanding this process is crucial for grasping how modern banking functions and the implications it has for both individuals and the broader economy.