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Answer:
Explain each of the following terms in your own words.
Currency - a system of payment also known as money
Interest - is a fee you pay for borrowing money
Money supply - the total amount of money in a country
Profit - a financial gain
Stock - a fraction of ownership of a company
Answer each of the following questions in complete sentences.
Banks are businesses. Like other businesses, they seek profit. How do they earn profit?
They earn money through bank fees and interest payments
Why might an individual want to use a bank? Give an example of why a person would use a bank.
They might use a bank to keep their money safe.
Why might a business want to use a bank? Give an example of why a business owner would use a bank.
A business owner might use a bank to get a loan.
What is the Federal Reserve?
The federal reserve is the central bank of the United states.
The money supply is the total amount of money available in the economy. How do changes in the money supply affect people and businesses?
It affects it because people will have more or less money to spend
How does banking affect the money supply?
It affects it by increasing the money supply.
hope this helps :]
Interest - In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. It is distinct from a fee which the borrower may pay the lender or some third party
Money supply - In macroeconomics, the money supply refers to the total volume of currency held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include currency in circulation and demand deposits.
Profit - A profit is the difference between the revenue that an economic entity has received from its outputs and the opportunity costs of its inputs. It equals to total revenue minus total cost, including both explicit and implicit costs.
Stock - A stock (also known as an equity) is a security that represents the ownership of a fraction of a corporation. This entitles the owner of the stock to a proportion of the corporation's assets and profits equal to how much stock they own. Units of stock are called "shares."
How do they earn profit?
Profit describes the financial benefit realized when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question. Any profits earned funnel back to business owners, who choose to either pocket the cash or reinvest it back into the business.
Why might an individual want to use a bank?
Consumers usually view banks as places to keep money or as places to go to borrow money. The types of accounts you can have with a bank may include: Checking accounts. Savings accounts.
Why might a business want to use a bank?
Banks provide business-specific financial services that help business owners manage their money. In addition to basic checking account services that allow business owners to deposit funds and write checks, they may also allow businesses to transfer money by Automated Clearing House (ACH) and wire.
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