What are the characteristics of frictional reserve banking

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Reference no: EM13773005

Why US banking system is known as fractional Reserve?

Why modern ban king systems are known as fractional reserve?

Answer: because only a fraction of checkable deposits is backed by currency

What are the characteristics of frictional Reserve banking?

checkable deposit money by banks limited by the amount of currency reserves obligated by law

banks operating on the basis of fractional reserve are vulnerable to Panic or runs

Interest rates and monetary policy

What is interest?

Reference no: EM13773005

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