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:

Social Benefits

The advantages or positive effects that an action or policy has on society as a whole, including things like improved health, education, and welfare.

Private Benefits

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Negative Externality

A cost that affects a party who did not choose to incur that cost, often associated with production or consumption of goods and services.

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The market worth of real estate, influenced by factors such as location, amenities, and the condition of the property.