Asked by Nathan Vandervoort on May 30, 2024
Verified
An important function of commercial banks is to _____.
A) print new currency
B) issue fiat money
C) mint coins
D) redeem currency for precious metals
E) make loans
Commercial Banks
Depository institutions that historically made short-term loans primarily to businesses.
Loans
Borrowed sums of money that need to be repaid with interest over a predetermined period.
- Recognize the role of commercial banks in the economy, including lending and profit generation.
Verified Answer
ZK
Zybrea KnightJun 05, 2024
Final Answer :
E
Explanation :
One of the primary functions of commercial banks is to make loans to individuals and businesses. This is how they earn a profit and keep the economy running by providing funds for investment and growth. Neither A, B, C or D is a primary function of commercial banks in the modern monetary system.
Learning Objectives
- Recognize the role of commercial banks in the economy, including lending and profit generation.