Suppose Big Bank offers an interest rate of 5.5% on both savings and loans, and Bank Enn offers an

Suppose Big Bank offers an interest rate of 5.5% on both savings and loans, and

Bank Enn offers an interest rate of 6% on both savings and loans. a. What profit opportunity is available?

b. Which bank would experience a surge in the demand for loans? Which bank would receive a surge in deposits?

c. What would you expect to happen to the interest rates the two banks are offering?

 

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