Question

Which of the following statements about the history of banks are true? Check all that apply. (A) The amount of gold represented by warehouse receipts was less than the actual amount of gold on deposit.(B) Goldsmiths were the first bankers and invented fractional reserve banking.(C) Warehouse receipts, issued by goldsmiths were often used instead of gold itself to make payments.

Answer 1

The correct answers are B) Goldsmiths were the first bankers and invented fractional reserve banking and C) Warehouse receipts, issued by goldsmiths were often used instead of gold itself to make payments.

The statements about the history of banks that are true are " Goldsmiths were the first bankers and invented fractional reserve banking and Warehouse receipts, issued by goldsmiths were often used instead of gold itself to make payments."

What Goldsmiths did was to store gold. Their clients feared that their gold could be robbed and needed a secure place to keep it. Goldsmiths came up with the solution. So Goldsmith stored the god and gave the costumers a receipt. The name was warehouse receipts. These receipts were used as a method of payment instead of gold. So Goldsmiths noted that the customers seldom retired the gold and that was when Goldsmiths started to lend gold and charged interest.