The principal source of funds for depository institutions consists of which of the following?
A)Deposits of domestic and foreign individuals, business firms, and governments
B)Loans from the Federal Reserve
C)Loans from foreigners
D)U.S. Government notes

Question

Quizplus · Accepted Answer

Deposits of individuals, business firms, and governments are the primary source of funds for depository institutions, including banks and credit unions. These deposits are used to make loans and other investments, which generate income for the institution. Loans from the Federal Reserve and U.S. Government notes can be sources of funds for depository institutions, but they are not the primary source. Loans from foreigners would be a source of funds for a country, but not for depository institutions specifically.

The Principal Source of Funds for Depository Institutions Consists of Which