In a fractional reserve banking system, banks are Question 22 options: a) allowed to lend out some, but not all, of the funds deposited with them. b) allowed to lend all of the funds that are deposited with them. c) required to forward a fraction of their deposits to the Federal Reserve. d) required to pay a tax on a fixed fraction of the reserves they hold. e) required to lend out a fraction of the funds deposited with them