What Is One Significant Characteristic of Fractional Reserve Banking

question 38

Multiple Choice

What is one significant characteristic of fractional reserve banking?

• A)Banks are not subject to "panics" or "runs."
• B)Banks use deposit insurance for loans to customers.
• C)Bank loans will be equal to the amount of gold on deposit.
• D)Banks can create money through lending their reserves.

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Definitions:

Hippocampus

A major component of the brain involved in learning and memory formation.

Association Areas

Regions of the brain that integrate and process information from the sensory pathways and other parts of the brain for higher functions such as learning, reasoning, and problem-solving.

Cortex

The outermost layer of the brain, responsible for complex functions including thought, memory, and consciousness.

Frontal Lobe

The part of the brain located at the front of each cerebral hemisphere, responsible for voluntary movement and has a role in activities such as decision-making, problem-solving, and planning.