With Fractional Reserve Banking

question 253

Multiple Choice

With fractional reserve banking

• A) banks can not generate profits.
• B) monetary policy will be ineffective.
• C) banks retain only a portion of their deposits in their vaults or at Federal Reserve banks.
• D) banks can act as securities brokers.

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Definitions:

Sole Proprietorship

A business structure where a single individual owns and operates the business, making them solely responsible for its debts and liabilities.

Dissolves

The act of officially ending the existence of an entity such as a corporation, partnership, or marriage.

Taxed

Imposed financial charges by a government on income, goods, or activities for public funding.

Separate Entity

A principle acknowledging that a business has its own legal identity, distinct from its owners or members, allowing it to own property, incur debts, and enter into contracts independently.