The Role of Banks in the Economy
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Questions and Answers

Which activity can banks perform indirectly through capital markets?

  • Creating demand deposits
  • Lending activities (correct)
  • Making loans
  • Accepting deposits from the public
  • What system do most countries have institutionalized in banking?

  • Minimum capital requirements
  • International set of capital standards
  • Fractional-reserve banking (correct)
  • Basel Accords
  • Where did banking in its modern sense evolve in the fourteenth century?

  • Capital markets
  • Prosperous cities
  • Renaissance Italy (correct)
  • Ancient world
  • What is the main role of banks in a country's economy?

    <p>Ensuring financial stability</p> Signup and view all the answers

    What do banks generally hold as liquid assets?

    <p>Portion of their liabilities</p> Signup and view all the answers

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