What is the financial system and what is its purpose in the economy?
February 12th, 2010 | by admin |galvax asked:
What is the financial system and what is its purpose in the economy?
What is the financial system and what is its purpose in the economy?
Thank you.
One Response to “What is the financial system and what is its purpose in the economy?”
By $so fresh so clean$ on Feb 13, 2010 | Reply
It is a system made up of savers and borrowers. For example, bank holders and the bank themselves.
If you take out a bank CD, the bank will pay you interest for using your money. They may pay you 3%, but they will lend that money to someone else for 7%, keeping the 4%. That’s how the bank makes their money.