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 car.
- Jamir 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.