When the receipts given by goldsmiths to depositors were used to make purchases,
A) the gold standard was created.
B) existing banking laws were violated.
C) the receipts became in effect paper money.
D) a fractional reserve banking system was created.

Question

Quizplus · Accepted Answer

When the receipts given by goldsmiths to depositors were used to make purchases, they essentially functioned as paper money. This was the precursor to the development of modern paper currency. The gold standard, existing banking laws, and fractional reserve banking systems were not directly related to this phenomenon.

When the Receipts Given by Goldsmiths to Depositors Were Used