In a system with 100-percent-reserve banking:
A)all banks must hold reserves equal to 100 percent of their loans.
B)no banks can make loans using deposits made at their institutions.
C)the banking system completely controls the size of the money supply.
D)no banks can accept deposits.

Question

Quizplus · Accepted Answer

In a 100-percent-reserve banking system, banks are required to keep all deposits as reserves and cannot use them to make loans.

In a System with 100-Percent-Reserve Banking