Which of the following most accurately describes a fractional reserve banking system? a Banks hold 100% of their deposits in cash in the bank vaut b. Banks hold a small fraction of their deposits in cash and invest the remainder in long term assets such as treasuries and loans c. Banks hold a large fraction of their deposits in cash and use the remainder to pay their employees. d. Banks pay interest as a fraction of deposits.
Which of the following most accurately describes a fractional reserve banking system? a Banks hold 100% of their deposits in cash in the bank vaut b. Banks hold a small fraction of their deposits in cash and invest the remainder in long term assets such as treasuries and loans c. Banks hold a large fraction of their deposits in cash and use the remainder to pay their employees. d. Banks pay interest as a fraction of deposits.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
Section: Chapter Questions
Problem 4PA
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