Banking (Commercial and Central Banking)

The table shows information about four financial institutions.

Which institution is most likely to be a commercial bank?

• A

• B

• C

• D

What is considered as a liability of Commercial Banks?

• Deposits from customers

• Real estate properties

• Luxury cars

• Art collections

What is the main aim of a commercial bank?

• To act as banker to the government

• To issue bank notes

• To make a profit

• To manage the national debt

What is a function of a commercial bank?

• controlling money supply

• issuing notes and coins

• accepting deposits

• lending money to the government

Which activity is most likely carried out by a commercial bank rather than a central bank?

• Accepting deposits from the public and granting personal loans

• Printing banknotes

• Supervising financial institutions

• Acting as lender of last resort

Which of the following statements about different banks in an economy is correct?

• The central bank determines the tax and spending policies of the government

• The central banks loans to small businesses and members of the public

• Commercial banks holds the gold and foreign reserves of a country

• Commercial banks settle debts by clearing cheques of customers and debit card payments

Which statement best describes a central bank?

• A bank that mainly provides loans to households and small businesses

• A business that only exchanges foreign currencies for tourists

• A bank owned entirely by private shareholders to maximise profits

• A financial institution responsible for managing a country’s monetary and banking system

Why are central banks usually the only institutions allowed to issue currency?

• To increase competition among banks

• To prevent commercial banks from making profits

• To ensure uniformity and control over the money supply

• To allow governments to avoid taxation

Which function does a central bank provide for the general public?

• accepting deposits

• issuing banknotes

• making loans

• providing overdrafts

Which activity is correctly linked to the organisation that provides it?

• A

• B

• C

• D