Who is usually considered the largest saver in the economy?

Knowing which group saves the most helps us understand how money flows into investments and drives growth.

What do banks usually do with the money you deposit?

Banks play a key role in connecting savers with borrowers. Your deposits allow banks to keep money moving in the economy.

When a bank pays 3% interest on your deposit but charges 7% on a business loan, what is the 4% difference called?

This difference is a major source of profit for banks, helping to cover operating costs (like staff wages and technology) while also generating revenue.

What is an asset?

In finance, the term “asset” is used all the time. It’s a basic building block for understanding money, business, and investing.

What does the term “liquidity” mean in finance?

Liquidity is an important idea in finance. It shows how quickly people, businesses, or banks can use their money or assets to cover short-term needs.

Which of the following is considered a liquid asset?

What is the main purpose of the capital market?

The capital market is an important part of the financial system where money moves between investors and companies or governments.

What is the main purpose of the money market?

The money market is another key part of the financial system. Unlike the capital market, it deals with a different time period of investments.

A tomato sauce producer agrees today to buy tomatoes at a fixed price, with payment and delivery next month. What type of financial contract is this?

In finance, contracts are often used to lock in prices or manage risk. They help businesses and investors plan ahead despite changing market conditions.

What does the term “equity” refer to in finance?

Equity is an important concept in finance that reflects the value remaining in an asset or company after certain costs or obligations have been accounted for.

Imagine you buy a new car for $25,000. You pay a $5,000 deposit and borrow the remaining $20,000 from the bank. What is your equity in the car?

Which of the following is a responsibility of the central bank?

Central banks perform several important functions to keep the financial system running smoothly.

Who are the main participants in the stock exchange?

Many people and organizations are involved in trading and managing activity in financial markets.

Which of the following is not a function of a stock exchange?

Stock exchanges perform several important roles that support companies and investors.

Which type of commodity is not sold in a commodity market?