connect the depositors with the borrowers.

Loans

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Banks

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Demand deposits

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Investors

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Solution

The correct option is B Banks
The banks lend the deposits as loans. The banks collect an interest amount for these loans. This interest amount it collects from the borrowers is more than the interest the bank pays its depositors. The difference between these interests is the profit generated by the bank.

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Similar questions

Q15.The difference between the interest paid to the depositors and the interest charged on the borrower by a bank is called

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