Fractional reserve banking is a term used to describe a banking system whereby

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61. Fractional reserve banking is a term used to describe a banking system whereby Banks hold reserves equal to a multiple

Answer

Answer Option c) is correct. Reason:

Fractional reserve banking is a system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal. This is done to theoretically expand the economy by freeing capital for lending.

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