HISTORY
THE INDUSTRIAL REVOLUTION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Income from farming is the major source of money for farmers, hence the farmer’s ability to repay loans is dependent on farming income. Banks need collateral (security) against loans.
Detailed explanation-2: -Wealth from the Slave Trade Mainly, Britain, America, Europe and Africa profited from the slave trade. The trade also created, sustained and relied on a large support network of shipping services, ports, and finance and insurance companies, employing thousands of people.
Detailed explanation-3: -Banks don’t “lend out” reserves, except to each other. Reserves are created by the central bank and only held by banks. Reserve requirements and liquidity requirements ensure that banks have enough money to settle anticipated customer deposit withdrawals.
Detailed explanation-4: -Because new businesses don’t have business credit of their own, the bank has to look at the credit of the people who own the business. Banks often deny startup loan requests because the personal credit of the borrower has problems.