Money and Banking

What do savings represent in an economy, according to the video?

• A claim on future goods and services.

• Physical assets like gold or paper currency.

• The total wealth of an individual.

• A promise of immediate consumption.

According to the speaker, what is the primary utility of gold compared to paper money?

• Gold is inherently more valuable because it is a natural resource.

• Gold is primarily useful for its aesthetic qualities and resistance to counterfeiting.

• Paper money is more universally accepted as a medium of exchange.

• Paper money is lighter and easier to transport than gold.

What challenge arises when individuals with savings try to directly fund entrepreneurs' projects?

• Savers cannot easily evaluate the viability of projects, and entrepreneurs cannot easily find savers.

• Entrepreneurs are unwilling to share profits with individual savers.

• Savings are often too small to fund large projects individually.

• The lack of a standardized currency for transactions.

What are the main components of a bank's balance sheet?

• Assets, Liabilities, and Equity

• Income, Expenses, and Profit

• Revenue, Cost of Goods Sold, and Net Income

• Cash Flow, Investments, and Debt

What is the annual net profit of the bank, considering its interest income, interest expense, and other operational costs?

• $900,000

• $500,000

• $300,000

• $400,000