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Quiz on Commercial Banks Quiz

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1. What is the primary function of a commercial bank?

2. Commercial banks use the deposits of their customers to primarily do what?

3. Why do commercial banks need to maintain a certain level of reserves?

4. What is the major source of income for commercial banks?

5. In general, who regulates commercial banks in the United States?

6. What is the role of the Federal Insurance Deposit Corporation (FDIC) in the context of commercial banks?

7. Which type of deposit account typically earns the highest interest rate at a commercial bank?

8. What term is used to refer to the risk that a borrower will default on a loan from a bank?

9. How do central banks typically infuse liquidity into commercial banks in times of financial stress?

10. Which of the following represents a liability for a commercial bank?