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Questions and Answers
Which of the following best describes the origin of the word 'bank'?
What is the primary role of a bank?
What is the main purpose of banking?
What is the role of banking in the economy?
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What is the primary function of a financial institution?
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Study Notes
Origin of the Word 'Bank'
- The word 'bank' originated from the Italian word 'banca', meaning 'bench', as early bankers used to conduct their business on benches in marketplaces.
Role of a Bank
- The primary role of a bank is to act as a financial intermediary between savers and borrowers, facilitating the flow of funds between them.
Purpose of Banking
- The main purpose of banking is to provide a safe and secure environment for individuals and businesses to deposit and manage their funds, thereby promoting economic growth and stability.
Role of Banking in the Economy
- Banking plays a crucial role in the economy by providing liquidity, facilitating credit creation, and enabling the efficient allocation of resources.
Primary Function of a Financial Institution
- The primary function of a financial institution is to mobilize savings and channel them into productive investments, thereby contributing to the overall economic development.
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Description
Test your knowledge about banks and financial institutions with this quiz! Learn about the origins of banks, their role as financial intermediaries, and how they connect deposits to lending activities. Challenge yourself and see how well you understand the world of banking.