The Most Basic Functions of Depository Institutions Are

question 105

Multiple Choice

The most basic functions of depository institutions are

• A) safekeeping for depositors.
• B) record keeping for depositors.
• C) efficient and economical transfer of payments.
• D) accepting deposits and granting loans.

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Definitions:

Foreign Exchange Market

A global decentralized or over-the-counter market for trading currencies, facilitating international trade and investment.

Peg

Fixing the exchange rate of a currency by linking it to another currency or basket of currencies.

Fixed Exchange Rates

A currency system where the value of a country's currency is pegged to another currency, a basket of currencies, or a commodity like gold, minimizing fluctuations in exchange rates.

International Monetary Reserves

International monetary reserves are assets held by central banks or monetary authorities in various forms, such as foreign currencies, gold, and Special Drawing Rights (SDRs), used to back the currency and support economic policies.