21 How commercial banks can create money?

Making loans

22 What does demand deposit means?

Chequeable deposits

23 Demand deposits are money because they can be used to make

Payments

24 Which type of cheque is the more secure form of transfer of money?

Cross cheque

25 Discount rate is always less than

Market rate of interest

26 What is the most important source of income for commercial banks?

Interest charged on loans

27 What the rate charged by a central bank on loans is called?

Discount rate

28 Where short term loans can be obtained?

Money market

29 Where long term loans can be obtained?

Capital market

30 What are the functions of commercial banks?

Accept deposits, create deposits money and provide loans