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Svetradugi [14.3K]
3 years ago
6

What is the difference between a commercial bank and a savings bank

Business
2 answers:
Andreas93 [3]3 years ago
3 0
The primary difference is the way each is regulated, which determines the type of banking products they offer. ... Both commercial banks and S&Ls also make loans to businesses and government agencies.
DerKrebs [107]3 years ago
3 0

Answer:

A commercial bank provides services such as accepting deposits, making business loans, and offering basic investment products that is operated as a business for profit.

A savings bank has a primary purpose which is accepting savings deposits and paying interest on those deposits.

Explanation:

Commercial banks are<u> owned and managed by a board of directors selected by stockholders</u>. Many commercial banks are <u>large, multinational corporations.</u>

S&Ls (Savings and Loan banks- just another name) are <u>owned and chartered differently</u> than commercial banks, and are <u>generally more locally oriented in terms of customers.</u>

By law, S&Ls <u>may lend up to 20% of their assets for commercial loans</u>, and only half of that can be used for small business loans. S&L <u>must be able to show that 65% of its assets are invested in residential mortgages and other consumer-related assets.</u>

Commercial banks do not have these types of limitations that S&L banks do.

Hope this helped :)

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Suppose that the reserve requirement for checking deposits is 12.5 percent and that banks do not hold any excess reserves.
andriy [413]

Answer:

1) If the Fed sells $2 million of government bonds, the economy’s reserves Decrease by $2 million, and the money supply will Decrease by $16 million.

2) The money multiplier will remain unchanged. True

3) As a result, the overall change in the money supply will remain unchanged. True

Explanation:

1.) We have the reserve requirement for checking deposits as 12.5% with banks not holding any excess reserves.

To calculate Money Multiplier:

Money Multiplier = \frac{1}{required reserved ratio} = \frac{1}{0.125} = 8

If the Fed sells $2 million of bonds, reserves will decrease by $2 million and the money supply will decrease by 8 x $2 million = $16 million.

2) and 3) Now the Fed lowers the reserve requirement to 10 percent, but banks choose to hold another 2.5 percent of deposits as excess reserves.

To calculate Money Multiplier:

Money Multiplier = \frac{1}{required reserved ratio} = \frac{1}{0.1+0.025} = 8

Money multiplier is 8 same as in 1) Therefore the statements: "The money multiplier will remain unchanged" and "As a result, the overall change in the money supply will remain unchanged" are both True.

5 0
3 years ago
Consumers will willingly make less-informed decisions: a. ​ if information costs are less than the perceived benefits of gatheri
ikadub [295]

Answer:

The correct answer is option d.

Explanation:

In a perfectly competitive market, it is assumed that the buyers and sellers have perfect information and take their economic decisions accordingly. But in reality, buyers and sellers do not have perfect information.

Information comes at a cost, which can sometimes be high. The rational decisions of the consumers without full information can lead to irrational outcomes.

If the cost of gathering information is less than or equal to the benefit earned from the information, the consumers will gather information and make fully informed decisions.  

But if the cost is higher than the benefits, the consumers will not gather information and make a less informed decision.

7 0
3 years ago
A review of Munchen Corporation's financial statements reveals the following information: cost of goods sold: $100,000; decrease
drek231 [11]

Answer:

The Cash paid to suppliers was $85,000

Explanation:

Data provided in the question:

Cost of goods sold = $100,000

Decrease in inventory = $5,000

Increase in accounts payable = $10,000

Now,

Cash paid to suppliers will be

= Cost of goods sold - Decrease in inventory - Increase in accounts payable

= $100,000 - $5,000 - $10,000

= $85,000

Hence,

The Cash paid to suppliers was $85,000

8 0
3 years ago
During August, Salinger Company accumulated 580 hours of direct labor costs on Job 40 and 630 hours on Job 42. The total direct
Inga [223]

Answer:

Dr Work in process $13,210

Cr Wages payable $13,210

Explanation:

Based on the information given the appropriate journal entry to record the flow of labor costs into production during August is:

Dr Work in process $13,210

Cr Wages payable $13,210

(580*$13)+(630*$9)

($7540+$5670)

(To record the flow of labor costs into production during August)

6 0
3 years ago
Select which of the ways that entrepreneurs improve the economy is being described:
Ugo [173]

Answer:

Select which of the ways that entrepreneurs improve the economy is being described:  As a family's basic needs are met, jobs are given to the people who help provide these needs.

new business

Explanation:

Entrepreneur improves the economy by starting a new business, they are employer of labor and improves the economy

7 0
2 years ago
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