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.

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