A system in which banks keep less than 100 percent of the deposits available for withdrawal is known as a(n)

Question

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A fractional reserve banking system is a system in which banks are required to keep only a fraction of the deposits available for withdrawal. The rest of the deposits are used for lending and other investment purposes. This system allows for the creation of credit and the expansion of the money supply, but also carries the risk of bank runs and financial instability.

A System in Which Banks Keep Less Than 100 Percent