Unit 5: Money and Finance Quiz

What is the primary role of financial institutions in the economy?

• To provide loans only
• To act as intermediaries in the flow of money
• To regulate government policies
• To create new currencies

Which of the following is NOT a function of commercial banks?

• Accepting deposits
• Providing insurance services
• Lending money
• Transferring money

What distinguishes a central bank from commercial banks?

• It accepts deposits from individuals
• It controls the quantity and use of money
• It provides loans to individuals
• It offers investment products

Which of the following is an example of a non-banking financial institution?

• Commercial bank
• Development bank
• Central bank
• Credit union

How do financial institutions contribute to individual wealth creation?

• By providing loans with high interest rates
• By offering savings accounts that pay interest
• By charging fees for all services
• By limiting access to financial advice

What is one of the roles of financial institutions in the community?

• To promote individual wealth only
• To provide knowledge on savings and wills
• To limit access to financial services
• To discourage community projects

Which payment method allows for electronic transfer of funds?

• Cash payment
• Cheque payment
• Money transfer
• Barter trade

What is a disadvantage of using cash for transactions?

• It is universally accepted
• It can be easily lost or stolen
• It allows for easy tracking of expenses
• It can earn interest

What is a key advantage of using a credit card?

• It encourages saving
• It allows purchases without immediate funds
• It is accepted everywhere
• It has no fees

What is a disadvantage of cheque payments?

• They are easy to trace
• They can be valueless if funds are insufficient
• They are convenient for small amounts
• They have no associated fees