In the absence of fractional-reserve banking practices,commercial banks would
A) be less safe as places to keep money.
B) have more money available to be put to work on behalf of business firms.
C) charge depositors higher fees for keeping deposits.
D) be considered as nonprofit organizations.
E) need to borrow money if a run occurred.

Question

Quizplus · Accepted Answer

In the absence of fractional-reserve banking, banks would not be able to lend out a portion of deposits, thus reducing their income from interest on loans. To compensate for this loss of revenue, they would likely charge depositors higher fees for keeping their deposits.

In the Absence of Fractional-Reserve Banking Practices,commercial Banks Would