ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Maria makes a deposit of $10, 000 into her Smalltown Bank savings account. Smalltown Bank holds 20% of her deposit, then lends the remaining $8, 000 to Ben to buy a new car. This practice of retaining only a portion of deposits on hand is called
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the gold standard
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fractional reserve banking
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The Federal Reserve system
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representative money
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Explanation:
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