What is one way that financial institutions benefit the economy? By approving increases in the federal deficit By placing limits on the amount businesses spend By reducing the amount people pay in taxes By providing loans so people can open businesses

By providing loans so people can open businesses is the correct option.

Explanation:

By providing loans so people can open business. FInancial market and iInstitutuion are important and play vital role in accumulastion of capital and production of goods and services. The price for credit and returns and investment works as a signal for sthe producers and consumers. these institutions direct funds from household to businesses and government. The more efficient a fincancial market is lower the search of transations costs in an economy. In such markets there are lots of options for the borrowers and lenders closely matching to their needs.

By providing loans so people can open businesses