Question

How does fractional reserve banking create money in an economy?

A. It makes it possible for foreign currency to be converted into new
U.S. dollars.
B. It forces banks to maintain a reserve that covers all deposits
made at a bank
C. It gives banks the authority to print their own money during an
economic emergency.
D. It allows the same money to be both stored as a deposit and
loaned to businesses.

Answer 1

D. it allows the same money to be both stored as a deposit and loaned to businesses.

Explanation:

Just took the quiz :)