An argument in favor of fractional-reserve banking is that
A) unregulated institutions would be riskier than regulated fractional-reserve banks.
B) it increases the precision of the central bank's control over the quantity of money.
C) a bank deposit is owned by the depositor, so the bank has no legal right to lend the deposit to someone else.
D) it decreases the risk of a bank running out of cash.

Question

Quizplus · Accepted Answer

Fractional-reserve banking, when regulated, is considered less risky than unregulated institutions because regulations are designed to ensure stability and protect depositors.

An Argument in Favor of Fractional-Reserve Banking Is That