Which of the Following Statements Is True

question 20

Multiple Choice

Which of the following statements is true?

• A)Key performance ratios for credit unions and building societies indicate that from 2005 to 2014 their cost structures were higher than for banks.
• B)Key performance ratios for credit unions and building societies indicate that from 2005 to 2014 their cost structures were lower than for banks.
• C)Deposits are a higher proportion of the funding base for banks than for credit unions and building societies.
• D)Despite credit unions and building societies having higher cost structures over the period 2005-2014 than banks, they have much lower bad debt expenses than banks and hence have navigated the GFC well in terms of their overall performance.

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Definitions:

Personal Saving

Personal saving is the portion of personal income that is not expended on consumption or taxes and is instead saved for future use.

Total Saving

The sum of personal savings, plus business savings (undistributed corporate profits), and government surplus in an economy.

Disposable Income

Financial reserves allocated for households for expenditures and savings following income tax reductions.

APC

Average Propensity to Consume, which is the ratio of total consumption to total income.