How do banks engage in specialization and division of labor?
A) Banks are the only avenue for savers to save their money and for borrowers to borrow for projects.
B) Banks specialize in lending to risky borrowers.
C) Banks coordinate the collection of lenders' funds and employ specialists in risk assessment to assure that the funds are safely used.
D) Banks specialize in facilitating IPOs.

Question

Quizplus · Accepted Answer

Banks engage in specialization and division of labor by coordinating the collection of lenders' funds and employing specialists in risk assessment to ensure that the funds are safely used. This division of labor allows for a more efficient use of resources and reduces the risk for lenders. Additionally, some banks may specialize in certain types of lending or have specific departments that focus on particular services, such as wealth management or international banking. However, options A, B, and D are not accurate descriptions of how banks engage in specialization and division of labor.

How Do Banks Engage in Specialization and Division of Labor