Fractional-reserve banking means that
A) banks hold less in reserves than the amounts they owe their depositors.
B) all of a bank's reserves are held by Federal Reserve Banks.
C) some gold is reserved to back paper money but not 100 percent.
D) reserves actually have three components: required, excess, and free.
E) a dangerous situation exists in which bank loans exceed deposits.
Correct Answer:
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Q27: Fractional-reserve banking depends on the assumption that
A)
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A)
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A)
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