Question

Fractional reserve banking can be thought of as a bank withholding a portion of its total deposits that are not loaned out. holding deposits equal to its net worth. paying a fraction of its profit to depositors. loaning out all of its reserves.

Answer 1

Answer:

can be thought of as a bank withholding a portion of its total deposits that are not loaned out.

Explanation:

Fractional reserve banking is when banks accepts deposits from customers and lend out only a fraction of the deposits. The remaining are kept as reserves.

The central bank requires bank to keep certain amount of money as reserves in order to meet unforeseen circumstances