2. A bank makes a profit by borrowing from depositors at a low interest rate and lending...

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2. A bank makes a profit by borrowing from depositors at a low interest rate and lending at a higher interest rate. The bank must hold enough reserves to meet depositors’ withdrawals. The bank’s balancing act is to balance the risk of loans (profits for stockholders) against the security for depositors.

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Essential Foundations Of Economics

ISBN: 9780520219465

7th Global Edition

Authors: Bade, Robin;Parkin, Michael

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