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Use a large percentage of their checkable deposits for the purpose of __________.

A.
paying interest
B.
giving loans
C.
employee salaries
D.
maintaining reserves

the answer is D

User Cohadar
by
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1 Answer

5 votes

Answer:

B. giving loans

Step-by-step explanation:

Banks use a large proposition of their deposits to create loans for other customers. The federal reserve requires commercial banks to hold a small percentage of deposits as reserves. The reserve requirement is one of the monetary policy tools of the Federal Reserve.

In most cases, the reserve requirement is around 10 percent or below of the total deposits. As a fraction, 10 Percent is a tenth (1/10), which is a small proportion of the total deposits. The bigger percentage, 90 percent, is used to create loans to other customers.

User Noora
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