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Suppose that bank AAA offers an interest rate of 6.5% on both savings and loans, and another bank, Bank BBB, offers an interest rate of

Suppose that bank AAA offers an interest rate of 6.5% on both savings and loans, and another bank, Bank BBB, offers an interest rate of 8.3% on both savings and loans. What profit opportunity is available? Which bank would experience a surge in the demand for loans? Which bank would receive a surge in deposits? What would you expect to happen to the interest rates the two banks are offering?

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