Which of the following correctly explains how banks began in Italy and England? a. Monarchs were the first bankers, lending out cash at zero interest to help the poor learn a craft and develop themselves intellectually.

Goldsmiths were the first bankers, and the paper receipts they issued for gold held on deposit became valued as money.

Explanation:

Italian goldsmiths were the first bankers in the world, even the name bank derives from the Italian "banca". Since they had safe vaults, they kept the gold savings from their rich clients, and they started to lend money to other people who needed it. They developed the fractional reserve system because they were able to actually lend more money than the amount of gold that they had in their vaults.

London goldsmiths followed a similar path and they added their own inventions, the check or "cheques" and money transfers.

due to the changes the federal reserve is making the unused reserves will impact the economy by them facing inflation. inflation is definfed as the increase in pricing of a good or service but the decline of the value of money used for purchasing those items. when the economy has a high inflation rate, they are subject to money loss and hurt on the economy.