Question

A bank is an institution which accepts _____ from the public and advances ______.

Options

• Deposits, loans

• Loans, deposits

• Cash, cash

• Loan, loan

Answer 1

A bank is an institution which accepts deposits from the public and advances loans.

Explanation:

1. A bank is different from other financial institutions, which may accept deposits and make advances but cannot create credit.
2. It purchases and sells money, and transacts other related business. 
3. Thus, a bank is an institution that accepts deposits from the public and advances loans.