Commercial Banks
Commercial bank creates credit
By discounting of bills
By advancing loans
By investment
All of the above
All of the above
Discounting of Bills: Provides immediate funds to bill holders, increasing the money supply.
Advancing Loans: Increases the money supply by creating new deposits when loans are disbursed.
Investment: Infuses funds into the economy by purchasing securities, thereby creating credit.
Each of these activities contributes to the overall creation of credit in the financial system, which in turn supports economic growth and development.
All of the above Discounting of Bills: Provides immediate funds to bill holders, increasing the money supply.
Advancing Loans: Increases the money supply by creating new deposits when loans are disbursed.
Investment: Infuses funds into the economy by purchasing securities, thereby creating credit.
Each of these activities contributes to the overall creation of credit in the financial system, which in turn supports economic growth and development.
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Why commercial banks keep a certain amount of money as reserveA. Expanding the banking business
B. Meeting the requirements of customers
C. Acquiring the satisfaction of having cash
D. Meeting the requirements of central bank
The kind of loan according to issue
A. All of the above
B. Discounting of bill
C. Mortgage loan
D. Cash credit
The loan which can be demanded by bank by bank at anytime
A. Demand loans
B. Bills of exchange
C. Overdraft
D. All the above
Current account is suitable for
A. Salaried persons
B. Business community
C. None of the above
D. Capitalists
Commercial bank creates the following money
A. Metallic
B. Credit
C. All the above
D. Paper
The amount in fixed deposit can be
A. None of the above
B. Deposited many times
C. Deposited only once
D. Withdrawn many times
The important basic kinds of accounts opened in commercial banks are
A. Three
B. Countless
C. Four
D. Two
One response to “Commercial bank creates credit”
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Explain it.please.!!
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