Which of the Following Is a Service of Depository Institutions

question 243

Multiple Choice

Which of the following is a service of depository institutions?

• A) decreasing the liquidity drain of funds in the banking system
• B) monitoring the Federal Reserve
• C) pooling risk
• D) loaning funds to other depository institutions at the discount rate

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Definitions:

Taxable Income

The portion of an individual’s or entity’s income that is subject to income tax after all deductions and exemptions.

Progressive

A system or policy where the level of contribution or effort increases with some measure of capacity, such as a progressive tax system where higher income earns pay a higher rate.

Proportional

Relating to or denoting a relationship where elements vary together at a constant rate and a change in one element results in a corresponding change in another.

Regressive

A term describing a tax system where the tax rate decreases as the taxable amount increases, placing a greater relative burden on lower income earners.