The function that banks perform by obtaining funds from households, businesses, and governments and lending these funds to other households, businesses, and governments is known as

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Financial intermediation is the function performed by banks where they obtain funds from various sources and then lend those funds to others who need them. Banks act as intermediaries between the savers and borrowers, helping to channel funds from those who have surplus to those who have a shortage of funds. This helps to allocate resources efficiently and promote economic growth. Lending intermediation, fiscal intermediation, and liquidity intermediation are not commonly used terms in finance and do not accurately describe the function of banks.

The Function That Banks Perform by Obtaining Funds from Households