Banking

Question 1

Which is the correct order of entities that benefit when banks make a profit?

Revolt · Accepted Answer

shareholders, companies, and the economy

Question 2

Read the graph that displays mortgage interest rates between 1978 and 1983.In what year did consumers get the best deal on a mortgage?

Revolt · Accepted Answer

1978

Question 3

The Federal Reserve Bank of the United States is also known as the

Revolt · Accepted Answer

central bank.

Question 4

What explains the difference between retail and commercial banking?

Revolt · Accepted Answer

Retail banks loan money to small businesses, while commercial banks loan money to large corporations.

Question 5

best

Revolt · Accepted Answer

Interest helps them cover business costs.

Question 6

What types of investments do banks use to make a profit? Check all that apply.opening checking accountsstarting new businessesbuying stocks and bondsbuying several propertiesissuing loans to all customersbuying the rights to loans

Revolt · Accepted Answer

buying stocks and bonds; buying several properties; buying the rights to loans

Question 7

Read the graph that displays interest and total payments on a loan.Banks make the most money and take the most risk with an interest rate of

Revolt · Accepted Answer

18 percent.

Question 8

The Federal Reserve manages the nation’s currency and money supply by

Revolt · Accepted Answer

manipulating interest rates and acting as a lender to banks.

Question 9

Which example best describes how a bank injects money into the economy?

Revolt · Accepted Answer

A bank approves a loan for a customer.

Question 10

Which banker would a software company most likely visit for help to raise large amounts of capital to acquire, or buy out another company?

Revolt · Accepted Answer

an investment banker

Banking Answers

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