In a fractional reserve banking system,banks
A) are able to create money when excess reserves are lent to individuals who need to borrow money.
B) can lend all of the deposits that are received.
C) must purchase gold that equals the value of the deposits received.
D) must deposit all cash from depositors with the Federal Reserve.
E) have to deposit all cash from depositors in their own bank vault.
Correct Answer:
Verified
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