Question

Which is the most important function of banks in an economy?
Which is the most important function of banks in an economy?

(1 point)
(1 point)

Answer 1

The most important function of banks in an economy is to act as intermediaries between savers and borrowers. By channeling funds from individuals and institutions with surplus capital (savers) to those in need of capital (borrowers), banks facilitate investments, support economic growth, and enable efficient allocation of resources. This role is crucial for maintaining the liquidity in the economy and promoting overall financial stability.