Question

1. where do banks primarily get the money they lend to borrowers?

a. from depositors’ savings
b. from printing new money
c. from taxes collected by the government
d. from selling stock in the bank

1. complete the definition: a credit union is a ______ that accepts deposits, makes loans, and provides a wide array of other financial services and products.

a. for - profit retail company
b. insurance - only provider
c. government department
d. member - owned financial cooperative

1. bank or credit union? purpose is to produce a profit for its shareholders

a. bank
b. credit union

1. bank or credit union? mission is aimed at a social benefit to its community over making money

a. bank
b. credit union

1. the image states: \you are more than a member, you are a part owner.\ which type of financial institution is being described?

a. commercial bank
b. payday lender
c. credit union
d. investment brokerage

1. which institution is described as having a larger marketing budget?

a. local cooperatives
b. building societies
c. banks
d. credit unions

1. based on the phrase \you are more than a member, you are a part owner,\ what does membership imply?

a. members automatically receive higher interest rates
b. members own a portion of the institution
c. members have no voting rights
d. members are guaranteed approval for loans

1. based on the image text \more products & services available/offered,\ which type of financial institution is being described? choose the single best answer.

a. banks
b. both banks and credit unions
c. credit unions
d. neither

1. based on the image text \volunteer board of directors is elected by members,\ which type of financial institution is being described? choose the single best answer.

a. banks
b. both banks and credit unions
c. credit unions
d. neither

1. according to the image, profits are returned to members in which of the following forms? select all that apply.

a. reduced fees
b. lower loan rates
c. increased account fees
d. higher savings rates
e. higher loan rates

Explanation:

1. Banks use deposits from customers as the main source for lending.
2. Credit unions are member-owned, not for-profit financial cooperatives.
3. Banks are for-profit entities focused on shareholder profits.
4. Credit unions prioritize community benefit over profit.
5. Credit union members are part-owners of the institution.
6. Banks typically have larger marketing budgets than smaller, community-focused institutions.
7. The phrase directly states members own part of the institution.
8. Both banks and credit unions offer a wide range of financial products and services.
9. Only credit unions have volunteer boards elected by their member-owners.
10. Credit unions return profits to members through better rates and reduced fees, not higher costs.

Answer:

1. A. from depositors' savings
2. D. member-owned financial cooperative
3. A. Bank
4. B. Credit Union
5. C. Credit union
6. C. Banks
7. B. Members own a portion of the institution
8. B. Both banks and credit unions
9. C. Credit unions
10. A. Reduced fees, B. Lower loan rates, D. Higher savings rates