Credit and Financial Institutions

They generally have the lowest interest rates on loans.

• Credit Union

• Title Pawn Lender

• Payday Lender

• Bank

When you deposit money in a bank, what does the bank do with that money?

• Put it in a safe with your name on it.

• Pay dividends to your beneficiaries.

• Lend it out and charge interest to borrowers.

• Invest it in stocks for you.

What is one difference between Banks and Credit Unions?

• Banks have Checking accounts and Credit Unions have Savings Accounts

• Banks are for profit.  Credit Unions are Non-profit.

• Banks can give loans and Credit Unions cannot

• Credit Unions allow everyone to join and Banks are selective

What is interest?

• Something you do not have in economics

• The money corporations pay to their stockholders

• To set aside income for a period of time so that it can be used later

• The payment people receive when they lend their money or allow someone else to use their money

Which institutions charge the highest interest rates on loans?

• Pawn shops

• Payday lenders

• Schools

• Finance companies

The institution that primarily functions to collect public funds and distribute them back in the form of credit is...

• Capital market

• Bank

• Insurance company

• Cooperative

An example of a non-bank financial institution is...

• Bank Mandiri

• PT Asuransi Jiwa Bersama (AJB) Bumiputera 1912

• Bank Central Asia (BCA)

• Bank Negara Indonesia (BNI)

The financial institution that focuses on short-term financing for the purchase of consumer goods is...

• Venture capital company

• Financing company

• Central bank

• Pension fund

Which type of financial institution is typically member-owned and offers lower fees and interest rates?

• A) Commercial Bank

• B) Credit Union

• C) Investment Bank

• D) Payday Lender

What is the primary function of a central bank in a country's economy?

• A) To provide loans to individuals

• B) To regulate the money supply and interest rates

• C) To offer savings accounts to the public

• D) To invest in foreign markets