An Argument in Favor of 100 Percent Reserve Banking Is

question 573

Multiple Choice

An argument in favor of 100 percent reserve banking is that

• A) a bank deposit is owned by the depositor, so the bank has no legal right to lend the deposit to someone else.
• B) banks should be allowed to lend deposits in order to increase their profits and strengthen the banking system.
• C) unregulated institutions would be riskier than regulated fractional-reserve banks.
• D) it would limit the precision of the central bank's control over the quantity of money.

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Definitions:

Proceeds

Refers to the money or other benefits received from a transaction or event.

180 Days

A time period equivalent to roughly six months, often referenced in the context of deadlines or durations for specific actions or conditions.

Debtor

An individual or entity that owes money to another individual or entity, known as the creditor.

Financing Statement

A document filed to give public notice that a lender has a security interest in a debtor's personal property, used in secured transactions.