Banking Answers
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What explains the difference between retail and commercial banking?
A
Commercial banks loan money to small businesses, while retail banks loan money to large corporations.B
Retail banks loan money to small businesses, while commercial banks loan money to large corporations.C
Commercial banks help small businesses make capital purchases, while retail banks help big businesses invest.D
Retail banks help big businesses make capital purchases, while commercial banks help consumers invest.2
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Which statement best describes the effects of low and high interest rates on the economy?
L
Low interest rates encourage consumers to borrow and spend, while high interest rates encourage saving.H
High interest rates discourage consumers from investing, while low interest rates encourage investment.H
High interest rates encourage consumers to borrow and spend, while low interest rates encourage saving.L
Low interest rates encourage consumers to invest, while high interest rates discourage investment.3
Which is the correct order of entities that benefit when banks make a profit?
A
employees, shareholders, and the economyB
shareholders, shoppers, and the economyC
employees, companies, and the economyD
shareholders, companies, and the economy4
How do central banks govern the banking industry? Select four options.
A
by deciding how much banks must keep in reserveB
by overseeing the nation’s payment systemC
by supervising the loan process at banksD
by printing money for distribution to banksE
by responding quickly to banking crises that occurF
by auditing banks based on current regulations5
Read the graph that displays mortgage interest rates between 1978 and 1983.In what year did consumers get the best deal on a mortgage?
1
19781
19801
19821
19836
The main role of banks in the nation’s economy is to
s
store, lend, and invest money.s
store, lend, and borrow money.s
store, lend, and distribute money.s
store, lend, and approve money.7
Which are the roles of a bank? Check all that apply.
A
Storing and holding moneyB
Making purchases to create profitsC
Lending moneyD
Investing in the economyE
Creating money for the economy8
best
I
Interest enables them to control the economy.I
Interest helps them to satisfy customers.I
Interest enables them to stockpile money.I
Interest helps them cover business costs.9
What types of investments do banks use to make a profit? Check all that apply.
A
opening checking accountsB
starting new businessesC
buying stocks and bondsD
buying several propertiesE
issuing loans to all customersF
buying the rights to loans10
The Federal Reserve Bank of the United States is also known as the
p
people’s bank.c
central bank.w
world bank.r
retail bank.Did you find these answers helpful?
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