Can anyone answer this please in economics? thanks
(a) Explain the role of a financial intermediary.
(b) If we distinguish private and public saving within a national saving total, explain how these
are related to one another and to investment.
Solution
A) financial intermediary is a financial institution like a bank that facilitates the process of
lending and borrowing by holding funds. These can be commercial banks, life insurance
companies,pension funds, insurance funds etc. intermediaries channelise funds from those with
surplus to those who borrow. It acts as a middle man.
B) savings are a sum total of domestic and foreign savings. Also, investment equals the sum of
national savings and any capital inflows. According to the savings investment approach, total
saving in an economy equals investment . One is a leakage in the flow of income and the latter
an injection ..
Can anyone answer this please in economics thanks(a) Explain the .pdf
1. Can anyone answer this please in economics? thanks
(a) Explain the role of a financial intermediary.
(b) If we distinguish private and public saving within a national saving total, explain how these
are related to one another and to investment.
Solution
A) financial intermediary is a financial institution like a bank that facilitates the process of
lending and borrowing by holding funds. These can be commercial banks, life insurance
companies,pension funds, insurance funds etc. intermediaries channelise funds from those with
surplus to those who borrow. It acts as a middle man.
B) savings are a sum total of domestic and foreign savings. Also, investment equals the sum of
national savings and any capital inflows. According to the savings investment approach, total
saving in an economy equals investment . One is a leakage in the flow of income and the latter
an injection .
