Which of the following reasons is the primary motivator for a commercial 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 commercial bank to acquire new depositors is to have more funds available to give out in loans, which is a key function of a bank. By acquiring new depositors and the funds they deposit, a bank can increase its lending capacity and generate additional income through the interest charged on loans. A and B are not primary motivators for acquiring new depositors, as paying interest on deposit accounts and paying employees are necessary expenses regardless of the number of depositors. D and E are incorrect, as banks do not distribute dividends to investors (they pay out profits) and facilitating brokerage transactions is not a primary function of a commercial bank.

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