Question 6 [Fill in the blanks] - MCQ Questions (1 Mark) - Chapter 1 Class 8 Economics - Introduction to Banks - Economics

Last updated at August 14, 2026 by Teachoo

The difference between the interest earned on loans and the interest paid on deposits is known as the bank's ________

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Answer:

So, the correct answer is option (A):net interest income .

Let’s check all the options and see why they are correct or not:

Option (A) Net interest income - Net interest income is the difference between the interest earned on loans and the interest paid on deposits. This is the term that is used in the reference and also in banking terminology. So, this is correct .
Option (B) Gross interest income - Gross interest income is the total amount of interest earned on loans before deducting any expenses or taxes. This is not the term that is used in the reference or in banking terminology. So, this is incorrect .
Option (C) Interest margin - Interest margin is another way of expressing the net interest income as a percentage of total assets or total loans. This is not the term that is used in the reference or in banking terminology. So, this is incorrect .
Option (D) Interest spread - Interest spread is another way of expressing the net interest income as a difference between the average interest rate on loans and the average interest rate on deposits. This is not the term that is used in the reference or in banking terminology. So, this is incorrect .

Thus, option (A) is correct .

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