ECONOMICS
ECONOMIC INSTITUTIONS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Investing in other companies
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Charging fees for their services
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Collecting interest on loans
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Taking a percentage off of all deposits
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Detailed explanation-1: -They earn fees for customer services, such as checking accounts, financial counseling, loan servicing and the sales of other financial products (e.g., insurance and mutual funds).
Detailed explanation-2: -Excess deposits may be used to create credit to lend via commercial loans and other credit products or lend to other institutions at the overnight rate. Credit creation is a critical function of a commercial bank. Interest is the highest percentage of revenue at commercial banks[1].
Detailed explanation-3: -Detailed Solution. The correct answer is Deposits.
Detailed explanation-4: -Accepting deposits. Granting loans and advances. Agency functions. Discounting bills of exchange. Credit creation. Other functions.