Question

How does the practice of fractional reserve banking affect banks?

A. It allows banks to keep only a small percentage of their deposits in reserve.
XO B. It ensures that banks always have cash reserves equal to their total
deposits.
c. It prevents banks from profiting off loans they provide with deposited funds.
D. It gives banks the freedom to change interest rates on loans at any time.

Answer 1

A. it allows bank to keep only a small percentage of their deposits in reserve.

Step-by-step explanation:

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Answer 2

Answer: A

Step-by-step explanation:

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