Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. economics
  3. the banking system of the united states is a fract

The banking system of the United States is a fractional reserve system. What dangers does this...

80.2K

Verified Solution

Question

Economics

The banking system of the United States is a fractional reservesystem. What dangers does this pose for the safety of the bankingsystem?

can you answer this in a well explained paragraph thank you.

Answer & Explanation Solved by verified expert
3.7 Ratings (391 Votes)
The new banking system called fractional reserve banking is built on the premise that it is very unlikely that people would need all their deposits back at once One example of this is someone who deposits 100 into a bank Assuming the bank has a 25 per cent reserve ratio although it will be much lower in reality    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

A leaky 10-kg bucket is lifted from the ground to a height of 12 m at...

Chemistry
1.2K views

How much of a change in freezing point would the ocean experience if the glaciers and...

Chemistry
1.2K views

Give the wavelengths of maximum absorption for each solution as shown in the spectra provided. Use...

Programming
1.2K views

Using Euler method, ODE45 and Simulink solve the following ODE's. a) y+c(dy/dt)=10sinwt c=2, w=10, y(0)=0 Assume time span...

Geometry
1.2K views

Stella has a bachelor s degree Based on the bar chart below employment opportunities change...

Basic Math
1.2K views

Compute the slope of the line passing through 4 4 and 2 4 Write the...

Algebra
1.2K views

2x 23x 11 5 9x x

Accounting
1.2K views

Pharoah Company is constructing a building. Construction began on February 1 and was completed on...

Accounting
1.2K views

Fremont, which uses the high-low method, reported total costs of $10.40 per unit at its...

Accounting
1.2K views

Evaluate the effectiveness of results controls as a control system

Accounting
1.2K views

How are ABC rates calculated?

Accounting
1.2K views

only finding the irr and mirr An investor is evaluating the profitability of an anticipated...