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11 May, 14:59

In a system of 100-percent-reserve banking,

a. banks do not make loans.

b. currency is the only form of money.

c. deposits are banks' only assets.

d. all of the above are correct.

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Answers (1)
  1. 11 May, 17:52
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    The answer is letter a. 100% reserve banking is a planned substitute to fractional-reserve banking in which banks would be obligated to keep the entire amount of each investor's funds in cash, prepared for instant drawing on request. Funds put by customers in demand deposit accounts would not be loaned out by the bank since it would be lawfully obligatory to keep the full deposit to satisfy possible demand for expenditures.
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Home » Business » In a system of 100-percent-reserve banking, a. banks do not make loans. b. currency is the only form of money. c. deposits are banks' only assets. d. all of the above are correct.
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