The Role of Banks in Our Economy
Authored by Melissa Anderson
Business
9th - 12th Grade
FIN-BII 2 covered
Used 222+ times
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10 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary function of a bank?
Issuing credit cards
Accepting deposits and making loans
Providing financial counseling
Selling insurance products
Tags
FIN-BII 2.2
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are the primary reserves that banks keep to meet their reserve requirement?
Deposits from customers
Stocks and bonds
Cash, deposits due from other banks, and reserves required by the Federal Reserve System
Government bonds and securities
Tags
FIN-BII 2.2
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the phenomenon called when the original deposit creates a multiplier effect in the banking system?
Multiplier effect
Reserve effect
Deposit expansion
Bank lending cycle
Tags
FIN-BII 2.2
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How do banks earn money from the interest rate they receive on the loans they make?
They receive dividends from their shareholders
They earn fees for customer services
They earn interest on the securities they hold
They make money from the spread
Tags
FIN-BII 2.2
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the main role of the Federal Reserve in controlling the money supply?
Facilitating the flow of money in local communities
Regulating banks to ensure they meet public needs
Issuing bank charters for public need and convenience
Contracting or expanding the money supply by raising or lowering banks' reserve requirements
Tags
FIN-BII 2.2
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the main buffer against losses for a bank?
Government bonds
Customer deposits
Interest income
Equity capital
Tags
FIN-BII 2.2
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the action of taking deposits and making loans called?
Financial intermediation
Deposit expansion
Bank lending cycle
Reserve effect
Tags
FIN-BII 2.2
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