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Bank mobilizes the savings of people.
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False.
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- Should Banks Reinvest their Profits in the Communities where they operate?How does the banking system create money? Explain by giving an example.A bank can make profit by: a)borrowing money from the government at 0% interest. b)giving you a particular interest return on your savings and then loaning out the same money at a lower rate of interest. c)giving you a particular interest return on your savings and then loaning out the same money at a higher rate of interest. d)storing and locking away all the deposits made by consumers.
- The federal deposit insurance corporation(FDIC) does which 3 things? a. Directly manges every bank in the unitwd states b. Performs tests on banks to see if they are prepared for emergencies c. Takes over failing banks and sells them to better managed banks d. uses tax payer money to help out struggling banks e. Insures deposits in every bank account up to $250,000what is the benefit if the commercial banks create new money?Banks should have to hold all of their deposits. True or False? Explain.