Jane has just deposited $2,000 in her checking account. she knows that the bank will keep part of these funds on hand and loan out the rest. this is an example of

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Business

Brielle Burgess

17 July, 00:55

Jane has just deposited $2,000 in her checking account. she knows that the bank will keep part of these funds on hand and loan out the rest. this is an example of

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Braggs · Answer 1

The above is an example of Fractional-reserve banking. It is the practice whereby a bank accepts deposits, makes loans or investments, and holds reserves equal to a fraction of its deposit liabilities. Reserves are held as currency in the bank, or as balances in the bank's accounts at the central bank.