How does fractional reserve banking create money in an economy?
A. It makes it possible for foreign currency to be converted into new
U.S. dollars.
B. It forces banks to maintain a reserve that covers all deposits
made at a bank
C. It gives banks the authority to print their own money during an
economic emergency.
D. It allows the same money to be both stored as a deposit and
loaned to businesses.

The fractional reserve banking create money in an economy is the Option B; It forces banks to maintain a reserve that covers all deposits made at a bank.

What is Fractional reserve banking?

The Fractional reserve banking is defined as a system where the banks hold some fraction of the customers' deposit as reserves and the rest are used to generate returns in the form of interest rates on loans.

The United States banking system practices the fractional reserve banking because it is allows the commercial banks to get interest on customer's deposits with them.

The fractional reserve banking helps the economy grow through allowing the same money to be both stored as a deposit and loaned to businesses.

Hence, the Option B is correct. It forces banks to maintain a reserve that covers all deposits made at a bank.

Read more about Fractional reserve banking;

brainly.com/question/25239575

#SPJ2