Fractional reserve banking can be thought of as a bank withholding a portion of its total deposits that are not loaned out. hold

Question

elixir [45]

3 years ago

13

Fractional reserve banking can be thought of as a bank withholding a portion of its total deposits that are not loaned out. hold

ing deposits equal to its net worth. paying a fraction of its profit to depositors. loaning out all of its reserves.

Business

1 answer:

alina1380 [7] · Answer 1 · 2022-05-15T23:10:07+03:00

Answer:

can be thought of as a bank withholding a portion of its total deposits that are not loaned out.

Explanation:

Fractional reserve banking is when banks accepts deposits from customers and lend out only a fraction of the deposits. The remaining are kept as reserves.

The central bank requires bank to keep certain amount of money as reserves in order to meet unforeseen circumstances