WorksheetsHow Do Banks Make Money?!
Total questions: 11
Worksheet time: 7mins
What might happen if the government did not insure bank deposits?
Banks would be robbed far more often.
People would lose their savings if their banks went out of business.
Banks would have to buy safe with extremely thick metal walls.
Banks could no longer make loans to their customers.
Which of the following is a true statement about banking?
Keeping your money at home instead of a banks prevents you from paying the interest fees that banks charge.
It's generally safer to keep your money in a bank than to keep it at home.
Most new businesses are forced to start without loans from banks.
Most banks give their customers interest-free loans.
Compared to a checking account, the rules governing your use of a savings account are generally more:
Negotiable
Intuitive
Restrictive
Liberal
Bank's make their profits primarily by issuing ________.
equity
negotiable CDs
loans
notice deposits
Which of the following customers is a bank most likely to grant a full loan to?
A medium risk customer
A low risk customer
A high risk customer
All of the above
High risk borrowers are considered high risk because
they are responsible and pay back all of their loan in time and in full
they are mostly responsible and pay back their loan while missing 1 or 2 payments total
they are irresponsible and miss many payments or only make partial payments
the government has labeled them as high risk borrowers
When banks create new money, it leads to __________ throughout the economy.
unemployment
growth
deflation
inflation
The use of income today that allows for greater production in the future.
Investment
Savings
secondary market
risk
