Fractional Reserve Banking Is a System That Allows

question 47

Multiple Choice

Fractional reserve banking is a system that allows:

• A) banks to keep all their deposits on reserve as deposits at the central bank.
• B) banks to create money.
• C) banks to keep a very large percentage of their deposits on reserve as vault cash or as deposits at the central bank.
• D) banks to keep all of their deposits on reserve as vault cash or as deposits at the central bank.

---

Definitions:

Involuntary Bankruptcy

A legal process initiated by creditors seeking to have a debtor declared bankrupt by a court to enforce the liquidation or reorganization of the debtor's assets.

Bankruptcy Reform Act of 2005

A significant legislative act that amended the United States Bankruptcy Code, making it more difficult for individuals to file for bankruptcy under Chapter 7 and imposing stricter requirements.

Means Testing

A method used to determine an individual's eligibility for certain types of financial aid, benefits, or services based on their income and assets.

Trustees

Individuals or organizations appointed to manage and hold assets on behalf of others, typically within the structure of a trust.