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

Question

a. extending credit
b. guarding savings
c. providing mutual fund options
d. managing employee pay systems

Answer 1

a. extending credit

Extending credit is considered the most important function of banks in an economy as it helps facilitate economic activities by providing funds to individuals, businesses, and governments for investment, consumption, or other financial needs. This function of banks helps stimulate economic growth and development by enabling businesses to expand, individuals to purchase homes and cars, and governments to finance public projects.