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Otrada [13]
2 years ago
8

Why do banks practice fractional reserve banking?

Law
1 answer:
USPshnik [31]2 years ago
7 0

Answer:

Fractional reserve banking has pros and cons. It permits banks to use funds (the bulk of deposits) that would be otherwise unused to generate returns in the form of interest rates on loans—and to make more money available to grow the economy

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It was a part of the spoils system also known as political patronage. They would be called political patrons.

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