Finance

• Name one type of central bank mentioned.

  Eastern Caribbean Central Bank
• What do central banks control?

  Monetary policy of a region
• What are commercial banks used for?

  Opening savings and checking accounts
• What is a function of non-bank financial institutions?

  Provide micro-lending services
• What is an example of a non-bank financial institution?

  Credit unions
• What services do insurance companies provide?

  Saving and borrowing against policies
• What are some common services offered by financial institutions?

  Loans, cash advances, and savings
• How do banks earn revenue from loans?

  By charging interest on borrowed amounts
• What is the spread between interest rates?

  The difference between borrowing and lending rates
• If a bank lends $10,000 and you repay $15,000, what is the bank's profit?

  $5,000
• How do banks make money from foreign exchange?

  By the difference in buying and selling rates
• What is a common fee charged by banks?

  Fees for bank jobs and services
• Why do banks need funds?

  To cover operating expenses and defaults
• What must banks maintain according to central bank regulations?

  A certain amount of money in deposit
• What is a fixed deposit?

  A savings account with restricted access
• If you invest $5,000 in a fixed deposit at 5% interest, how much will you have after one year?

  $5,250
• What are the main services provided by commercial banks?

  • Checking accounts
  • Savings accounts
  • Fixed deposits
  • Loans and mortgages
  • Foreign exchange services
  • Safety deposit boxes
• What are the functions of central banks?

  • Control currency
  • Manage public debt
  • Promote financial stability
  • Manage monetary policy
  • Issue Treasury bills
  • Manage foreign exchange
• What are the types of financial institutions mentioned?

  • Central banks
  • Commercial banks
  • Non-bank financial institutions
  • Credit unions
  • Insurance companies
  • Micro-lending agencies
• What are the sources of revenue for banks?

  • Interest on loans
  • Fees for services
  • Foreign exchange spreads
  • Credit and debit card fees
• What are the risks banks face?

  • Customer defaults on loans
  • Operating expenses
  • Regulatory requirements
  • Market fluctuations
• What are some examples of other financial companies?

  Trust companies, merchant banks, insurance companies
• What is the primary role of central banks?

  To maintain and control the money supply
• What are some functions of central banks?

  Control currency, manage public debt, promote stability
• What does a central bank control in an economy?


  The currency and money supply
• How do central banks influence interest rates?

  By managing monetary policy and public debt
• What is the purpose of Treasury bills?

  To allow investment in government debt
• How do central banks manage foreign exchange?

  By controlling the amount of foreign currency in the economy
• What is one function of central banks regarding commercial banks?

  To regulate their operations and requirements
• What does it mean for a central bank to be a lender of last resort?

  It provides emergency funds to struggling banks
• How does the central bank influence commercial bank lending?

  By setting reserve requirements for banks
• What role does the central bank play in economic data collection?

  It analyzes GDP, inflation, and employment data
• What is one educational role of central banks?

  To promote financial literacy in the community
• What are the main functions of central banks?

  • Control currency
  • Manage public debt
  • Promote financial stability
  • Manage monetary policy
  • Influence interest rates
  • Issue Treasury bills
  • Manage foreign exchange and reserves
  • Regulate commercial banks
  • Operate payment systems
  • Lender of last resort
  • Conduct research and data analysis
  • Educate the public on financial matters
• How do central banks promote financial stability?

  • Adjust interest rates based on inflation
  • Control the money supply
  • Manage exchange rates
  • Ensure commercial banks meet reserve requirements
• How might a central bank respond to a recession?

  • Lower interest rates to encourage borrowing
  • Increase money supply to stimulate spending
• What happens if a commercial bank faces financial trouble?

  • It can seek help from the central bank
  • The central bank may provide emergency funds
• What is the significance of Treasury bills?

  • They are government-backed investments
  • They help finance national projects
  • They can have long maturity periods
• What impact do interest rates have on the economy?

  • High rates discourage borrowing
  • Low rates encourage spending and investment
• What is the main topic of the discussion in the study material?

  Business finance