In general,financial institutions
A) exclude those businesses that lend to the public.
B) act as intermediaries between savers and investors.
C) number fewer than a thousand in the United States.
D) hold reserves equal to the value of checkable deposits.
E) operate as nonprofit institutions for the public good.

Question

Quizplus · Accepted Answer

Financial institutions typically act as intermediaries between savers and investors, facilitating the flow of funds between the two parties. They may take deposits from savers and use those funds to make loans or investments on behalf of investors. This process helps to allocate capital efficiently in the economy and provides benefits to both savers and investors. Option A is incorrect as financial institutions do lend to the public. Option C is incorrect as there are many financial institutions in the United States. Option D is incorrect as financial institutions are required to hold reserves, but the amount held is typically a fraction of checkable deposits. Option E is incorrect as financial institutions generally operate for profit.

In General,financial Institutions