15 marker bank

Question 1

commercial bank defintiion

Answer 1

an institution that accepts deposits, makes loads and other basic financial services to businesses and individuals

Question 2

commercial bank examples

Answer 2

barclays
hsbc

Question 3

investment bank

Answer 3

institutions which play advisory role in private equity investments, mergers and acquisitions and bonds between those who need capital and those who have it to trade

Question 4

examples of investment bank

Answer 4

Goldman sachs
Morgan stanley

Question 5

main aim of commercial banks

Answer 5

to make a profit

Question 6

how do commercial banks make a profit

Answer 6

by creating credit
offering a higher interest rate on loans such as mortgages (repayments)

Question 7

how do commercial banks impact AD

Answer 7

if commercial banks set a high interest rate on loans then less the cost of investing and spending is higher
aggregate demand falls and the economy will shrink

if commercial banks have high interest on savings accounts then more people will save their money additionally decreasing AD

vice versa

Question 8

how do banks create credit

Answer 8

when banks lend to individuals or firms they pay interest on their loans
loans are partly made up of the deposits withdrawn from the bank