L505: Revision Quiz

Credit creation means expansion of deposits.

• True

• False

_____ is a system where the bank keeps a portion of cash deposit as a reserve and lend the balance amount as a loan.

This is the source of money in the market:

• Cash received from foreign banks

• Cash issued by Central bank

• through Fractional Reserve Banking

• Both (b) and (c)

_____ banks have mainstream business of providing home loans.

• Commercial

• Savings

• Savings and Loan

• Credit Union

What is the primary function of commercial banks?

• Issuing currency notes

• Providing home loans

• Accepting deposits and lending money

• Regulating the stock market

What is the role of the Federal Reserve in the US banking system?

• Issuing passports

• Regulating commercial banks

• Providing healthcare services

• Managing national parks