Final answer:
The two basic functions of commercial banks are to accept deposits and make loans.
Step-by-step explanation:
The two basic functions of commercial banks are to accept deposits and make loans.
Banks attract depositors by guaranteeing to pay them interest on their savings accounts and also borrow money from other banks or central banks. They use the funds from deposits and borrowing to make loans to individuals and businesses.
For example, when someone deposits money in a bank, that deposit becomes a liability for the bank. The bank can then use those funds to provide loans to borrowers who need financing for various purposes, such as purchasing a home or starting a business. The interest paid on these loans helps the bank generate profits.