Why is a fractional reserve banking system so unstable

Reference no: EM13797220

1- Why is a fractional reserve banking system so unstable?

2- Describe two ways in which the government regulation has made the fractional the fractional reserve banking system possible.

3- Make sure you explain how the fractional reserve system is brought about,

4- Also, how would a complete free market with regard to the monetary and banking system (i.e.., no government fiat money, no federal Reserve, no federal deposit Insurance Corporation, and no regulations of the banking and monetary system whatsoever) eliminate the fractional reserve banking system?

5- Finally how does the government directly and indirectly create inflation? Make sure to explain all the responses and answer all parts to the question.

Reference no: EM13797220

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