Choose the statement that is incorrect.
A)Fractional-reserve banking is a system in which banks keep a fraction of their depositors' funds as a cash reserve and lend the rest.
B)Fractional-reserve banking was invented by gold prospectors in the Canadian Yukon during the gold rush.
C)100 percent reserve banking is a system in which banks keep the full amount of their depositors' funds as a cash reserve.
D)The requirement to hold 100 percent reserves lowers bank profits.
E)The Austrian School of economists say that fractional-reserve banking violates property rights because the bank has no legal right to lend a deposit to someone else.

Question

Quizplus · Accepted Answer

Fractional-reserve banking was not invented by gold prospectors in the Canadian Yukon during the gold rush. The practice has been around for centuries and can be traced back to Medieval Europe.

Choose the Statement That Is Incorrect