Question

How does fractional reserve banking grow the economy?
A. By making it possible for foreign currency to be converted into
new U.S. dollars
B. By allowing the same money to be both stored as a deposit and
loaned to businesses
C. By forcing a bank to maintain a reserve that covers all deposits
made to it
D. By giving banks the authority to print their own money during an
economic emergency

Answer 1

Answer:

the answer is b

Explanation: just got it right on A.P.E.X, hope it helps

Answer 2

The fractional reserve banking helps the economy grow through allowing the same money to be both stored as a deposit and loaned to businesses.

The Fractional reserve banking is a system where the banks hold some fraction of the customers' deposit as reserves and the rest are used to generate returns in the form of interest rates on loans.

• The United States banking system practices the fractional reserve banking because its allows the commercial banks to get interest on customer's deposits with them

Therefore, the Option B is correct because the fractional reserve banking helps the economy grow through allowing the same money to be both stored as a deposit and loaned to businesses

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