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Economics Jamb Past QuestionsQuestions and Answers on Types and functions of financial institutionsQuestion 31 :The most important economic characteristic differentiating commercial banks from other financial institutions is their? A. Function as a safe and profitable store place for savings B. Role in financing balance of payment deficits C. Status as an intermediary between savers and borrowers D. Ability to create and destory money Question 32 :Restriction on credit creation by commercial banks can be effected through? A. An overdraft B. Loans and advances C. Demand deposits D. Liquidity ratio Question 33 :Which of the following factors enhances the ability of commercial banks to create money? A. Reduction in the reserve ratio B. Leakage of cash out of banking system C. Excess of reserves D. Insistence on collateral security Question 34 :Commercial bank reserves at the Central Bank have the effect of? A. Controlling credit and money supply B. Discouraging banking operations C. Advancing trade prospects D. Reducing bank frauds Question 35 :The basic purpose of imposing legal reserve requirements on commercial bank is to? A. Assure the profitability of commercial banks B. Provide a device through which credit creation by banks can be controlled C. Provide a proper ratio between earning and non-earning bank assets D. Provide the Central Bank with working capital |
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