Which Statement Best Characterizes the Lending Strategy of Banks

question 174

Multiple Choice

Which statement best characterizes the lending strategy of banks?

• A) Banks make most their profits from account fees.
• B) Banks lend mostly to large and familiar companies rather than smaller local firms.
• C) Banks charge borrowers a slightly lower interest rate than they pay to depositors.
• D) Banks lend money both for investment and consumption purposes.

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Definitions:

Impulsive Decision

A choice made quickly and without much thought, often based on immediate desires or feelings rather than careful consideration.

Subconscious Ego

A component of the psyche that operates below the level of conscious awareness, influencing thoughts, feelings, and behaviors, often derived from Freudian psychological theory.

George Herbert Mead

An American sociologist known for his contributions to the development of symbolic interactionism, emphasizing the importance of communication and the social self in understanding society.

Social Beings

Refers to the inherently social nature of humans, who seek and form relationships and communities as part of their identity and survival.