3.2.5.3 Role of the financial sector in the economy

    Cards (44)

    • The financial sector facilitates savings, lending, and investments
    • Banks manage funds and provide loans
    • Key functions of banks in managing funds and providing loans:
      1️⃣ Accepting deposits
      2️⃣ Providing loans
      3️⃣ Channeling funds from savers to borrowers
    • Lending by banks is essential for economic growth and investment.

      True
    • How do investment banks differ from commercial banks?
      Accessing capital markets
    • What is the financial sector defined as?
      Institutions that manage money
    • The financial sector contributes to economic growth and stability by enabling individuals and businesses to save, borrow, and invest.

      True
    • Banks manage funds and provide loans to support economic activity
    • Banks channel funds from savers to borrowers, enhancing economic efficiency and stability.
      True
    • Investment banks assist companies in going public through Initial Public Offerings
    • What is the primary role of stock exchanges in capital allocation?
      Facilitating share trading
    • What is the primary role of insurance companies in managing risk?
      Providing financial protection
    • Insurance companies mitigate financial risks by pooling premiums and paying out claims, contributing to economic stability.

      True
    • The financial sector comprises several key institutions that facilitate savings, lending, and investments
    • Key financial institutions work together to ensure the smooth operation and stability of the financial system.

      True
    • Banks provide loans, accept deposits, and manage payments
    • What is the purpose of stock markets in the financial system?
      Buying and selling shares
    • Banks channel funds from savers to borrowers, enhancing economic efficiency
    • What is the role of investment banks in Initial Public Offerings (IPOs)?
      Underwriting stock offerings
    • How do insurance companies manage risk?
      By providing financial protection
    • The financial sector fosters economic growth by facilitating savings, lending, and investments.

      True
    • Steps taken by financial regulations to mitigate risks:
      1️⃣ Ensure stability and resilience
      2️⃣ Protect consumers and investors
      3️⃣ Promote transparency and accountability
    • The financial sector is essential for economic growth and development.
      True
    • What is the role of stock markets in the financial sector?
      Trading shares
    • Banks manage funds by accepting deposits
    • Match the investment banking activity with its description:
      IPOs ↔️ Help companies go public
      Underwriting ↔️ Issue new stocks and bonds
      Mergers and Acquisitions ↔️ Advise on M&A transactions
    • The financial sector contributes to economic growth and stability
    • The financial sector facilitates savings, lending, and investments.investments
    • What are the key financial institutions that make up the financial sector?
      Banks, insurance companies, investment funds, stock markets
    • Order the key functions of banks in supporting economic activity
      1️⃣ Accepting Deposits
      2️⃣ Providing Loans
      3️⃣ Managing Transactions
    • What is the primary role of investment banks in financing companies?
      Raising capital
    • Investment banks help companies access capital markets for expansion or acquisitions, unlike commercial banks that primarily provide loans.

      True
    • Stock exchanges allow companies to raise capital by issuing shares
    • Stock exchanges support economic growth by enabling companies to access funds for expansion and innovation.
      True
    • Match the function of insurance companies with its description:
      Issuing Policies ↔️ Providing coverage against specific risks
      Collecting Premiums ↔️ Maintaining coverage through regular payments
      Paying Claims ↔️ Compensating policyholders after a loss
    • What are the key components of the financial sector?
      Banks, insurance companies, investment funds, stock markets
    • Order the key financial institutions and their roles in the economy
      1️⃣ Banks: Provide loans, accept deposits, manage payments
      2️⃣ Insurance Companies: Offer coverage against risks
      3️⃣ Investment Funds: Pool money for investments
      4️⃣ Stock Markets: Platforms for buying and selling shares
    • What is the primary role of financial institutions in the economy?
      Managing funds
    • Investment funds pool money from multiple investors to invest in stocks, bonds, and other assets.

      True
    • Investment banks assist companies in accessing capital markets rather than providing loans directly.
      True