Responses
Banks must keep a specific percentage of deposits on hand.
Banks must keep a specific percentage of deposits on hand.
Banks must pay a specific fraction of their assets in taxes.
Banks must pay a specific fraction of their assets in taxes.
Banks must get government approval for all loans.
Banks must get government approval for all loans.
Banks reserve the right to raise interest rates at any time
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The accurate description of the requirements banks must meet under a fractional reserve banking system is:
Banks must keep a specific percentage of deposits on hand.
In a fractional reserve banking system, banks are required to hold only a fraction of their depositors' funds as reserves while they can lend out the remainder. This reserve requirement is set by the central bank or regulatory authority.
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