Banks Make Money Primarily Because the Interest Rate They Pay

question 28

True/False

Banks make money primarily because the interest rate they pay depositors is greater than the interest rate they charge borrowers.

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Definitions:

Continuous Innovation

Incremental updates or improvements to a product or service that do not significantly alter consumer behavior but enhance value.

Market Modification

Strategies used by companies to change the characteristics of the marketplace to improve competitiveness and customer appeal.

Discontinuous Innovation

A breakthrough product or service that creates a completely new market or drastically changes both the existing market and consumer habits.

Market Modification

The process of changing a market’s dynamics, including product offerings, pricing strategies, and customer engagement to achieve better performance or competitive advantage.