Question: 61. Fractional reserve banking is a term used to describe a banking system whereby O Banks hold reserves equal to a multiple of their

61. "Fractional reserve banking" is a term used to describe a banking system whereby O Banks hold reserves equal to a multiple of their demand deposit liabilities. Banks are required to quote interest rates in fractions. Banks hold reserves equal to only a fraction of their demand deposits liabilities based on a reserve ratio. O Individual banks share a fraction of the total funds deposited in the whole banking system.

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