Order how a bank turns deposits into loans
Exercise and reference answers
- Steps
- People deposit their savings
- The bank keeps some as cash
- The rest is lent to borrowers
- Borrowers pledge collateral
- Interest is repaid to the bank
- Instructions
- Tap the steps in the order they happen.
Explanation
_Source: syllabus Social Science, 'Understanding Economic Development', Ch 3 'Money and Credit'_