What is one significant consequence of fractional reserve, Ask an Expert

Economics

What is one significant consequence of fractional reserve banking? Banks are vulnerable to "panics" or "bank runs." Banks can only lend an amount equal to its deposits. Banks hold a portion of their deposits in gold. Banks can serve the withdrawals of all their depositors.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9687322

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