Which of the following statements best illustrates the history of the fractional banking system? Multiple choice question. A goldsmith accepts deposits of gold and issues paper receipts less than the amount of gold held; reserves are a fraction of the money supply. A goldsmith accepts deposits of gold and issues paper receipts in excess of the amount of gold held; reserves are equal to the money supply. A goldsmith accepts deposits of gold and issues paper receipts in excess of the amount of gold held; reserves are a fraction of the money supply