The primary function of the financial system is to channel funds from savers to investors.

Question

Quizplus · Accepted Answer

The financial system includes institutions, markets, and intermediaries that facilitate the flow of money between savers and investors. Savers deposit or invest their funds in financial institutions, such as banks or mutual funds, which then lend or invest those funds in businesses or individuals who need capital to fund their projects or activities. This process is essential for economic growth and development.

The Primary Function of the Financial System Is to Channel