Question

How does the banking system link investors and savers in modern society?

• A. By accepting deposits and advancing loans
• B. By financing trade and commerce
• C. By providing credit for poor farmers
• D. By attracting deposits from the public

Answer 1

The correct option is A

By accepting deposits and advancing loans

Banks act as a bridge between investors and savers, i.e. those who save but cannot use the funds themselves. They activate the idle resources of the community and bring them to productive uses. Banks accepts deposits and advance loans to businessmen and traders.