What Is One Significant Consequence of Fractional Reserve Banking

question 138

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:

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