Answered

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Which of the following best describes a fractional reserve banking system?
OA. A banking system in which a large portion of the bank's assets are
digital money rather than bills and coins.
B. A banking system in which banks keep a portion of deposits on
hand to satisfy their customer's demands for withdrawals.
OC. A banking system in which banks have only partial control over the
interest rates they charge on loans.
D. A banking system in which net worth is calculated by subtracting a
fraction of liabilities from assets.

Sagot :

GinnyAnswer

Final answer:

Fractional reserve banking involves banks lending out a portion of depositors' money while keeping some for withdrawals, impacting the money supply statistics.


Explanation:

Fractional reserve banking is a system where banks do not keep all deposits in the vault, allowing them to lend out some of the depositors' money while keeping some to meet withdrawal demands. When a bank issues a loan in this system, it creates new money, impacting the overall money supply stats (The different forms of money in the government money supply statistics).


Learn more about Fractional Reserve Banking here:

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