Q. “It is essentially savings and loan associations that help members’ savings grow at a higher interest rate”- is related to which of the following?

[A] Multiplier effect

[B] Liquidity trap

[C] Thrift

[D] Fiscal trap

Answer: C
Notes:

Thrifts, along with commercial banks and credit unions, qualify as depository institutions.  

  • Most people are familiar with commercial banks and credit unions, but the line becomes fuzzy when defining a thrift.  
  • Thrifts are essentially savings and loan associations that help members’ savings grow at a higher interest rate. More importantly, they are savings banks that specialize in real estate. 
  • Originally, thrifts only offered savings accounts and time deposits, but over the past 20 years, the banks’ scope of services has expanded to meet the needs of the average consumer.  
  • They now offer the same products as credit unions and commercial banks. 

Source: Ramesh Singh 

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