Multiple Choice
A good rule of thumb when budgeting for a home is to expect to make a _______ down payment.
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1. Introduction to Accounting
Useful Information
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How do regulatory agencies such as the OCC and the FDIC contribute to the banking system?
A
They provide loans directly to consumers and businesses.
B
They help ensure the safety and soundness of banks by enforcing regulations and providing deposit insurance.
C
They set interest rates for all commercial banks.
D
They determine the accounting standards used by all corporations.
Verified step by step guidance1
Understand the role of regulatory agencies in the banking system. Agencies like the OCC (Office of the Comptroller of the Currency) and FDIC (Federal Deposit Insurance Corporation) are tasked with ensuring the stability and reliability of financial institutions.
Recognize that these agencies enforce regulations to maintain the safety and soundness of banks. This includes monitoring compliance with laws, conducting examinations, and addressing risks within the banking system.
Learn about deposit insurance provided by the FDIC. This insurance protects depositors by guaranteeing their funds up to a certain limit in case a bank fails, thereby promoting trust in the banking system.
Clarify that regulatory agencies do not directly provide loans to consumers or businesses, nor do they set interest rates for all commercial banks. These functions are outside their scope.
Understand that accounting standards for corporations are determined by organizations like the Financial Accounting Standards Board (FASB), not by banking regulatory agencies like the OCC or FDIC.
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