Question

Question 21 of 28

Which of the following accurately describes the requirements banks must
meet under a fractional reserve banking system?
OA. Banks must pay a specific fraction of their assets in taxes.
B. Banks reserve the right to raise interest rates at any time.
C. Banks must keep a specific percentage of deposits on hand.
OD. Banks must get government approval for all loans.
SUBMIT

Answer 1

C.

Step-by-step explanation:

Under a fractional reserve banking system, banks are required to hold a fraction of their deposits as reserves and can lend out the remaining amount. The reserve requirement is set by the central bank and varies depending on the country and economic conditions.