Answer:
Explanation:One way that financial institutions benefit the economy is by providing loans so people can open businesses.
Financial institutions, such as banks, play a crucial role in providing the necessary capital for entrepreneurs and businesses to start, expand, or invest in their ventures. By offering loans, financial institutions enable individuals and businesses to access the funds they need to purchase equipment, hire employees, develop products, and cover other essential expenses.
This access to capital stimulates economic growth and job creation. When businesses are able to secure loans, they can invest in their operations, expand their production capacity, and innovate. This, in turn, leads to increased productivity, higher employment rates, and economic development.
By providing loans to individuals and businesses, financial institutions contribute to the overall health and growth of the economy. They facilitate entrepreneurship, promote innovation, and create opportunities for economic advancement. Additionally, the repayment of these loans with interest generates income for the financial institutions, which can then be used to support further lending and investment in the economy.