Question

Today's US banking system ensures that if everybody who has money on deposit in the banks
suddenly decides to take out their money all at once, all depositors can get their cash.
True or False

Answer 1

Answer:

False

Explanation:

Not all depositors will get their cash. The FED, which is the body that regulates commercial banks, requires the banks to keep only a small percentage of customers deposits in their custody. The percentage maintained in the banks is known as the reserve.  The percentage of the reserves requirement varies with time.

If all depositors decide to withdraw at once, they can not get their money as only the reserve amount will be available in the banks. Commercial banks usually lend out the rest of the customers' deposits to make profits.

Answer 2

According to the statement it's False.

Who is depositors?

Not all depositors will get their cash. The FED, which is that the body that regulates commercial banks, requires the banks to stay only a tiny low percentage of consumers deposits in their custody. the share maintained within the banks is thought because the reserve. the proportion of the reserves requirement varies with time.

If all depositors arrange to withdraw directly, they will not get their money as only the reserve amount are going to be available within the banks. Commercial banks usually lend out the remainder of the customers' deposits to form profits.

Find out more information about Depositors here:

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