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Loans

act as middle...

Question

act as middlemen between those who have surplus funds and those who are in need of those funds.

A

Funders

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B

Loans

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C

Investors

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D

Banks

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Solution

The correct option is D Banks
Banks lend deposits as loans and collect an interest for these loans. The interest amount they collect from the borrowers is more than the interest the banks pay their depositors. The difference between these interests is the profit generated by the banks.

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