An important effect of fractional reserve banking is that bankers have

Question

Quizplus · Accepted Answer

Fractional reserve banking allows banks to hold only a fraction of their deposits as reserves and lend out the rest. This gives bankers some discretion over the money supply as they can increase or decrease lending, which in turn affects the availability of money in the economy. However, banks are still subject to some control and regulation by the central bank and government policies. Therefore, option D is the best choice.

An Important Effect of Fractional Reserve Banking Is That Bankers