Asked by Lauren Stacy on Jun 06, 2024
Verified
The Roxy Bank of Englewood pools customer deposits and uses the funds to make loans to businesses and households.These businesses and households,now known as the borrowers,pay the bank interest,and the bank,in turn,pays depositors interest for the use of their money.Which of the following would best describe the process used by the bank?
A) Foreign exchange
B) Direct transfer
C) Indirect transfer
D) Barter system
Indirect Transfer
The movement of goods or services through an intermediary before reaching the final consumer, rather than a direct transaction from producer to consumer.
- Comprehend the process of indirect transfer of funds through banking institutions.
Verified Answer
CL
Cristhian LinaresJun 06, 2024
Final Answer :
C
Explanation :
The process described is an indirect transfer, where the bank acts as an intermediary between depositors (savers) and borrowers. The bank collects funds from depositors and then lends those funds to borrowers, facilitating the transfer of money from those who have it to those who need it for investment or consumption.
Learning Objectives
- Comprehend the process of indirect transfer of funds through banking institutions.
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