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20 April, 01:43

how do banks facilitate saving and borrowing in the same way that money facilitates buying and selling

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  1. 20 April, 02:04
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    Money is a medium through which people can buy and sell goods, similarly banks are a medium of borrowing and lending.

    Explanation:

    In a way, banks lend people money of a certain amount which they use to buy goods and then return to the bank.

    Similarly, when people deposit their money in a bank they are lending that money to the bank to invest somewhere else and then to return to them with interest when needed.

    Thus, banks function on the same principle of money transfer but here the transfer is in term of borrowing and selling and not real transfer of goods.
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