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If the Fractional Reserve System Did Not Exist

Question 55

Multiple Choice

If the fractional reserve system did not exist,


A) the banking system could not create money.
B) there would be no effect on the ability of the banking system to create money.
C) banks would loan out its required reserves.
D) banks would be highly susceptible to bank runs.
E) the banking system would realize the money multiplier.

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