Question

A fractional reserve banking system is one in which banks hold less than 100 percent of​ ________ as reserves.

a. deposits
b. loans
c. shareholder equity
d. securities

Answer 1

A) deposit. Fractional reserve banking system is what most countries use today, it requires banks hold a faction of money deposited by their customers. That amount is the required amount set by its central banks and they can loan the rest if their deposits to other customers which serves to expand the nation's economy.