What is fractional reserve banking, and why is it the key to bank profits? (Hint: What opportunities

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What is fractional reserve banking, and why is it the key to bank profits? (Hint: What opportunities to make profits would banks lose if reserve requirements were 100 percent?) Why does fractional reserve banking give bankers discretion over how large the money supply will be? Why does it make banks potentially vulnerable to runs?

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Macroeconomics Principles And Policy

ISBN: 9780324586213

11th Edition

Authors: William J. Baumol, Alan S. Blinder

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