Question

The primary source of earnings of commercial banks is income derived froma. the use of deposits to extend loans and undertake investments.b. vault cash and deposits held with the Fed.c. the checking account services provided to customers.d. services provided to the U.S. Treasury.

Answer 1

Answer:

a. the use of deposits to extend loans and undertake investments.

Explanation:

When you deposit money at a bank, they do not just hold on to all that money. They will loan some of it out to other people and charge them interest for borrowing it. They will also use some of it to purchase investments that earn returns (money). This is the most lucrative source of earnings for commercial banks.