Textbook ExpertVerified Tutor
12 Nov 2021
Introduction
Banks are viewed as financial intermediates because deposits come into them and loans move out of them. Of course, when banks provide loans to businesses or individuals, they prefer to lend to strong businesses with a good chance of returning the loans, rather than to borrowers who are losing money and may be unable to repay. Similarly, the worth of a loan also depends on the interest rate prevailing in the economy.
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