Multiple Choice
What is an important effect of fractional reserve banking?
A) Bankers always turn every dollar of excess reserves into loans.
B) A new bank deposit allows a bank to extend loans of the same amount to borrowers.
C) The commercial banking system has complete control over total reserves.
D) Bankers' choices about how much to lend can affect the money supply.
Correct Answer:
Verified
Correct Answer:
Verified
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