Money and Banking Quiz

Investing in stock markets to generate profits

Offering loans and mortgages to individuals and businesses

Issuing currency and providing banking services to the government

Regulating the money supply and interest rates to promote economic stability (correct)

It stabilizes interest rates to prevent excessive fluctuations in the economy

It amplifies the impact of initial deposits on the money supply through the lending process (correct)

It increases the reserve requirements for banks to mitigate financial risks

It reduces the amount of money in circulation by limiting lending activities

Ensuring that banks hold a fraction of their deposits as reserves for withdrawals

Restricting the amount of money in circulation to control inflation

Expanding the money supply by allowing banks to lend out a portion of deposits (correct)

Minimizing the risk of bank runs and financial panics