Fractional Reserve Banking
Interactive Video
•
Science, Business
•
6th - 12th Grade
•
Practice Problem
•
Hard
Wayground Content
FREE Resource
The video explains how banks traditionally used gold reserves but now rely on fractional reserve banking, where they lend out more money than they hold. This system allows economic growth but poses risks during crises, as seen with Northern Rock in 2007. Some people prefer gold for its stable value.
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2 questions
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1.
OPEN ENDED QUESTION
3 mins • 1 pt
What is the reserve ratio for banks with deposits over $71 million?
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2.
OPEN ENDED QUESTION
3 mins • 1 pt
Why do some people prefer to trust gold over banks?
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