Question

17)

Answer 1

Banks and other financial institutions use savings deposits to help borrowers by  using deposits to make loans.

Answer: Option A

Explanation:

• The two important functions of a bank are to lend loans and accept deposits. Bank accepts deposits from people for which interest is provided to them.
• With loans being one the core functions of a bank, these loans are given to borrowers through the deposits made by the people.
• This is done to ensure that the cycle of cash and money is maintained in the economy. Based on the need and requirements, the cycle is accelerated or slowed down.