If the Fractional Reserve System Did Not Exist

question 55

Multiple Choice

If the fractional reserve system did not exist,

• A) the banking system could not create money.
• B) there would be no effect on the ability of the banking system to create money.
• C) banks would loan out its required reserves.
• D) banks would be highly susceptible to bank runs.
• E) the banking system would realize the money multiplier.

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