Which of the following reasons is the primary motivator for a bank to acquire new depositors?
A) A new deposit account will make more funds available to pay the interest on other deposit accounts.
B) A new deposit account will make more funds available to pay the bank's employees.
C) A new deposit account will make more funds available to give out in loans.
D) A new deposit account will make more funds available to give out in dividends to its investors.
E) A new deposit account will make more funds available to facilitate brokerage transactions.

Question

Quizplus · Accepted Answer

The primary motivator for a bank to acquire new depositors is to have more funds available to give out in loans, which will generate income for the bank through interest payments made by borrowers. A and B are not the primary motivators as they do not generate income for the bank. D is incorrect because banks do not typically give out dividends to investors. E is not the primary motivator as it relates to brokerage services, which may not be a core business for the bank.

Which of the Following Reasons Is the Primary Motivator for a Bank