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9 June, 05:21

When a bank keeps $12 from a $100 deposit as legal reserves, it is using

a. the Federal Reserve System.

c. a legal reserve system.

b. a fractional reserve system.

d. a fractional deposit system.

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Answers (1)
  1. 9 June, 09:11
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    The correct answer for the question that is being presented above is this one: "b. a fractional reserve system." When a bank keeps $12 from a $100 deposit as legal reserves, it is using a fractional reserve system. It is the practice whereby a bank accepts deposits, makes loans or investments, and holds reserves that are a fraction of its deposit liabilities
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