Question

Answer each of the following questions in complete sentences.
Banks are businesses. Like other banks, they seek profit. How do they earn profit?

Why might an individual want to use a bank? Give an example of why a person would use a bank.

Why might a business want to use a bank? Give an example of why a business owner would use a bank.

What is the Federal Reserve?

The money supply is the total amount of money available in the economy. How do changes in the money supply affect people and businesses?

How does banking affect the money supply?

What would happen if banking didn’t exist?

Answer 1

I need help with all the questions?

Answer 2

You could research these questions

But, for Q1, banks will always get interest when you deposit money into their banks. They can also lend you money that you have to pay back with interest, so they profit off of it

For Q2, businesses want to keep track of their available money to spend, if they lack money they likely cant buy items to improve of fix their workplaces

Q3, federal reserve is the boss of all banks, it is meant to have a backup incase banks run out of money (this is possible and was what happened in 1920's depression). It stores money that the banks have in case of an emergency

Q4, realting to Q3, in order for banks to lend money to people, they NEED to actually have the money, if banks have no bills, then they cant lend people money, so it would be harder to get loans. On the contrary, if they have too much money, the money itself is devalued -> inflation

Q5, again, connecting to the previous questions, banks have to monitor how much they can lend out to people, money available -> they can lend out more

Q6, you can have days with lots of money or you can have a depression since banks would not be able to monitor all they lend. People would lose trust in banks and would cause economic mayhem