In a Fractional Reserve Banking System

question 153

Multiple Choice

In a fractional reserve banking system,

• A) bank panics cannot occur.
• B) the monetary system must be backed by gold.
• C) banks can create money through the lending process.
• D) the Federal Reserve has no control over the amount of money in circulation.

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Definitions:

Course of Performance

A term in contract law referring to the conduct between contracting parties that is consistent with their agreement, influencing future interpretations of the contract terms.

Course of Dealing

A sequence of actions or conduct between parties in a business or legal relationship that establishes a common basis for understanding future transactions.

Usage of Trade

Established practices, methods, or customs that are widely accepted and utilized in a particular industry or trade.

Dealer Appliance Outlet

A retailer specializing in the sale of appliances, typically offering products from various manufacturers.