Which of the following best describes a fractional reserve banking system?

A. A banking system in which net worth is calculated by subtracting

a fraction of liabilities from assets.

B. A banking system in which a large portion of the bank's assets are

digital money rather than bills and coins

C. A banking system in which banks keep a portion of deposits on

hand to satisfy their customer's demands for withdrawals.

D. A banking system in which banks have only partial control over the

interest rates they charge on loans.

Question

History

Ezra Bright

4 February, 11:10

Which of the following best describes a fractional reserve banking system?

A. A banking system in which net worth is calculated by subtracting

a fraction of liabilities from assets.

B. A banking system in which a large portion of the bank's assets are

digital money rather than bills and coins

C. A banking system in which banks keep a portion of deposits on

hand to satisfy their customer's demands for withdrawals.

D. A banking system in which banks have only partial control over the

interest rates they charge on loans.

+5

Answers (1)

Know the Answer?

Karissa Shields · Answer 1

The correct answer is letter C.

Explanation: Banks represents a big part of our lives. The evolution of banks has changed the business.

That are many things that can be done in a bank.

What the is earned by the bank is used most of the times to pay the interest on savings accounts and to cover the bank's expenses.