Banks Earn a Profit by

question 308

Multiple Choice

Banks earn a profit by

• A)keeping as many reserves on hand as possible.
• B)making loans at a lower interest rate than the rate that they offer on their deposits.
• C)charging an interest rate on their depositors' accounts.
• D)making loans at a higher interest rate than the rates that they offer on their deposits.
• E)not paying interest on their reserves.

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Definitions:

Government Tax

Mandatory financial charges or levies imposed by the government on individuals, businesses, and transactions to fund government spending.

Supply

Refers to the total amount of goods or services that are available for purchase at any given price level.

Government Subsidy

Financial assistance given by the government to individuals, businesses, or institutions to support or encourage certain economic activities.

Supply

The total amount of a good or service available for purchase at any given price level, within a specified period.