The idea that banks hold only a portion of deposits and lend the rest out is called the:
A) fractional reserve banking system.
B) partial banking system.
C) double-entry bookkeeping system.
D) loan-maximization system.

Question

Quizplus · Accepted Answer

The fractional reserve banking system is the practice where banks keep a fraction of deposits as reserves and lend out the remainder.

The Idea That Banks Hold Only a Portion of Deposits