Asked Apr 11, 2019

Banks don't lend out all of the funds deposited because:




they need to make more money on interest-bearing deposits.



they need to reduce their liquidity position.



it would not be profitable.



they have to satisfy any depositor who wants to withdraw funds.


Expert Answer

Step 1

Bank is financial institution that controlled and monitor by the central bank of the respective countries. Banks receives deposits from the public. The bank would be successful when it can give back the money to the depositor when they need it. If banks fails to ...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Related Economics Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: What issues do the online businesses face?  How are they similar to offline competition?  How are th...

A: Before analyzing the issues related to online businesses, firstly we need to know what is an online ...


Q: how to calculate GDP

A: GDP: Gross domestic product (GDP) is the sum of all finished goods and services produced in a countr...


Q: You are a profit-maximizing firm. Suppose there are two types of customers (50% of 1 type, 50% of th...

A: We are given:Price for coat and a pair of pants for consumers of type RPrice for coat = $80Price of ...


Q: Lou’s preferences over pizza (x) and other goods (y) are given by U(x, y) = 2xy2. His income is $200...

A: Since we are entitled to answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the que...


Q: Not counting Social Security, should the government force people to save money in personal accounts ...

A: The government should definitely promote savings in the economy, just as much as the ideal amount. I...


Q: A company has been tracking the average inspection cost on a robotics line for 8 years. Cost average...

A: Here, it is given thatCost average for first four years = $200 per completed unitCost average increa...


Q: Question #2: Using the following graph to answer the following questions: ATC AVC Q 0 4 0, D 0 D 0 0...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...


Q: IBM sold its personal computer (PC) and laptop business to Leonova (a Chinese company). HP and Compa...

A: International Economics:International economics is a branch of economics which studies the internati...


Q: in International trade about tariff: using a simple Swiss formula to calculate the final tariff: ini...

A: The Swiss formula for calculating final tariff rate is given below.