Explain how the existence of a lender of last resort might prevent bank runs.
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- Which one of the following functions that goldsmiths performed was most important in the development of modern-day fractional reserve banking? Goldsmiths stored gold for people in their vaults. Goldsmiths issued paper receipts to people who stored gold in the goldsmiths’ vaults. By issuing additional paper receipts, goldsmiths made loans to people who did not necessarily have gold deposits. The paper receipts issued by the goldsmiths were accepted by merchants as a means of payment.. Please outline the key precautions that a banker should take into consideration when granting loans with goods as collateral."What is partial amortization?