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The Role of Banks in the Economy Quiz

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Questions and Answers

What is the primary role of banks according to the text?

Guarantee a fixed interest rate for all deposits

Provide financial assistance to individuals for personal use

Ensure that all deposited money remains untouched

Facilitate the flow of money between savers, investors, borrowers, and businesses (correct)

In the given example, what is the total interest paid by the entrepreneur to the bank after two years?

R52,000

R44,000

R50,000

R48,000 (correct)

What is the purpose of the bank lending money to the entrepreneur?

To generate additional revenue for the bank

To reduce the bank's liabilities

To fulfill a legal requirement

To support the entrepreneur in starting a business (correct)

What happens to the money deposited by the woman in the bank?

It is used by the bank to lend to others Signup and view all the answers

What is the impact of the money flow on the economy according to the text?

The more the money flows, the more successful the economy will be Signup and view all the answers

What is the primary role of banks in the economy?

Facilitating the flow of money between savers, investors, borrowers, and producers Signup and view all the answers

In the given example, what is the interest amount the entrepreneur has to pay per year?

R24,000 Signup and view all the answers

What happens after two years in the given example?

The entrepreneur pays the bank the borrowed amount plus interest Signup and view all the answers

What is the purpose of the bank promising to pay interest to the woman in the example?

To encourage individuals to save and invest in the bank Signup and view all the answers

Why does the flow of money between consumers and producers need to be continual?

To support the success of the economy Signup and view all the answers