Which of the statements aboutfractional reserve banking are correct? I. Fractional reserve banking relies on not everyone
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Question:
I. Fractional reserve banking relies on not everyone withdrawingtheir money at the same time.
II. Fractional reserve banking allows banks to create money throughthe lending process.
III. Fractional reserve banking does not allow banks to hold excess reserves.
IV. Fractional reserve banking allows banks to create additional wealth by lending some reserves.
A. | II and III only | ||
B. | I and II only | ||
C. | I, II, and IV only | ||
D. | I, II, III, and IV |
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Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg
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