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How much profit does the bank make at the end of the year in this scenario?$100$120$140$2,000
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Which of these scenarios best describes fractional reserve banking?Maria makes a deposit of $20,000, and the bank loans $18,000 to Mark so he can buy a carJamir makes a $1,000 deposit and then withdraws it one week later.Isabella splits her $5,000 deposit between two different banks.A bank manager trades old, worn $20 bills for new currency issued by the Federal Reserve.
Why do banks keep some money in reserve rather than loaning out all of their deposits? Check all that apply.to ensure they have money on hand to loan to wealthy corporationsbecause they are required to by lawbecause they have to meet the withdrawal requests made by customersto ensure that bank runs will take placeto avoid loaning out funds whenever possible
What causes a bank run?Too many people try to withdraw their deposits at the same time.Banks refuse to loan out deposited funds.The Federal Reserve conducts an inspection of a bank’s fractional reserve.Interest rates fall too quickly.
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