Banks Earn a Profit on the Difference Between

question 33

Multiple Choice

Banks earn a profit on the difference between

• A)interest charged to depositors and interest offered to borrowers
• B)interest charged on loans and interest paid on deposits
• C)deposit and loan balances
• D)liabilities and deposits
• E)dividends and interest

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Definitions:

Regressive

A tax system in which the tax rate decreases as the taxable amount increases, placing a higher burden on lower-income earners.

Proportional

Relating to or having characteristics that maintain a consistent relationship in size, amount, or degree with something else, often used in mathematics and statistics.

Progressive Tax

A tax system in which the tax rate increases as the taxable amount increases, placing a higher tax burden on wealthier individuals.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to taxation, meaning that taxpayers pay the same percentage of their income in taxes regardless of how much they earn.