What Is One Significant Consequence of Fractional Reserve Banking

question 106

Multiple Choice

What is one significant consequence of fractional reserve banking?

• A)Banks are vulnerable to "panics" or "bank runs."
• B)Banks can only lend an amount equal to their deposits.
• C)Banks hold a portion of their deposits in gold.
• D)Banks can serve the withdrawals of all their depositors.

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Definitions:

Difference

The result of subtracting one quantity from another.

Inferential Statistics

A field within statistics that employs a random subset of data from a larger group to make deductions and provide descriptions about that larger group.

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The collection of quantitative techniques used to analyze data, draw conclusions, and make predictions.