Asked by Carrisa Green on Apr 27, 2024
Verified
Banks act as financial intermediaries by:
A) bringing together car buyers and auto dealers.
B) bringing together real estate brokers and home buyers.
C) printing money for all to use.
D) serving the credit needs of borrowers and the security needs of savers.
E) selling shares of stock to investors.
Financial Intermediaries
Institutions that facilitate the channeling of funds from savers to borrowers by intermediating between them.
Credit Needs
The requirement for borrowing funds to finance purchases, investments, or to bridge gaps in cash flow.
Security Needs
The requirement to protect a nation, organization, or individual from various threats, including cyber attacks, terrorism, and theft.
- Comprehend the contribution of financial intermediaries, with a focus on banks, to the economy.
Verified Answer
JR
Jackie renteriaApr 27, 2024
Final Answer :
D
Explanation :
Banks act as financial intermediaries by serving the credit needs of borrowers and the security needs of savers. They take deposits from savers and lend those deposits to borrowers, facilitating the flow of money in the economy. Banks also provide other financial services such as checking and savings accounts, loans, and credit cards. A and B are incorrect because banks do not specifically bring together car buyers and auto dealers, or real estate brokers and home buyers. C is incorrect because banks do not print money, that is the role of the central bank. E is incorrect because selling shares of stock is the role of investment banks or stockbrokers, not commercial banks.
Learning Objectives
- Comprehend the contribution of financial intermediaries, with a focus on banks, to the economy.