In 1-3 sentences, describe the saving-borrowing-investing cycle.

Business

1 answer:

beks73 [17]3 years ago

5 0

Answer:

see below

Explanation:

Saving involves putting aside a portion of one's income for future consumption. Financial institutions provide savings accounts where the public can save money. When many people save, the banks find themselves holding a lot of money in their custody. Since the banks have a need to make profits, they loan out these savings to individuals and businesses for expansion and consumption. When businesses borrow to expand, they are investing; when individuals borrow to start a business, it's an investment.

Savings in financial institutions provide funds for businesses and households to borrow and invest. The proceeds of investments are deposited in banks, loaned out again, and the cycle continues.

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