The Fractional Reserve System of Banking Evolved Because

question 54

Multiple Choice

The fractional reserve system of banking evolved because

• A)goldsmiths did not have safes large enough to hold all their gold deposits.
• B)there was always a dire need for additional money.
• C)goldsmiths knew that on any given day, only a few depositors would come to claim their deposits.
• D)goldsmiths knew that they would not be prosecuted for lending out money they did not have.

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