In the Fractional Reserve Banking System

question 8

Multiple Choice

In the fractional reserve banking system:

• A)half of the total money supply is held in reserves as currency
• B)a fraction of the total money supply is held in reserves as currency.
• C)an amount equal to the total money supply is held in reserves as currency.
• D)no fraction of the total money supply is held in reserves as currency.

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Definitions:

Commercial Banks

Financial institutions that offer a wide range of services such as accepting deposits, providing loans, and other banking services to the public.

Welfare Banks

Financial institutions or programs that aim to support the economically disadvantaged segments of society, though it's not a widely used term and may refer to various initiatives in different contexts.

Check-Cashing Outlets

Financial service providers that offer clients the ability to cash checks for a fee without needing a bank account.

Pay a Fee

The act of making a payment for a service or the right to engage in a particular activity, typically set at a fixed rate by the service provider or regulating authority.