Suppose you place your savings in a time deposit at the bank, and that bank lends some of those funds to a business that desires a loan. This is an example of

Question

Quizplus · Accepted Answer

This is an example of indirect finance, where funds are first obtained from savers through financial intermediaries, like banks, before being lent to borrowers who need them to invest in their businesses or meet other financial obligations. This is in contrast to direct finance, where borrowers obtain funds directly from savers without going through a financial intermediary.

Suppose You Place Your Savings in a Time Deposit at the Bank