The financial institutions in our banking system are all in the business of transferring funds from savers to investors. This process is known as

Question

Quizplus · Accepted Answer

Financial intermediation refers to the process of financial institutions, such as banks, receiving funds from savers and then lending/investing those funds to borrowers/investors. This process allows for the transfer of funds from savers to investors, while also providing benefits such as risk diversification and liquidity transformation. The other options - A) the circular flow, B) direct financing, and C) money laundering - do not accurately describe this process.

The Financial Institutions in Our Banking System Are All in the Business