Question

Which are the roles of a bank? Check all that apply.

Storing and holding money
Making purchases to create profits
Lending money
Investing in the economy
Creating money for the economy

Answer 1

Selected (apply):
- Storing and holding money — yes. Banks accept deposits and safekeep funds for customers.
- Lending money — yes. Banks make loans to households and firms, which is a core function.
- Investing in the economy — yes. By lending and buying securities, banks channel savings into productive investment.
- Creating money for the economy — yes. Commercial banks create broad money when they extend credit (central banks create base money).

Not selected:
- Making purchases to create profits — no (not a primary role). Banks do buy assets and manage portfolios, but their main functions are custody, intermediation (lending/investing), payments and money creation rather than simply buying goods to generate profit like a trading or retail firm.