1
AssignmentMultiple Choice

Banking

Question 1 • CHS Economics

When do banks make money from deposits?

Answer
A
when people withdraw money from their account
B
when banks pay interest to account holders
C
when people add money to their account
D
when banks loan the money to another consumer

Explanation

Banks can use deposits to make loans to consumers and earn interest on those loans. That interest income can exceed the interest and other costs the bank pays, which is how the bank makes money from deposited funds. The correct choice is “when banks loan the money to another consumer.”

AI-written and checked against the verified answer.

Next