Question

At the end of the week, Carla receives her paycheck and goes directly to the bank after work to make a deposit into her savings account. The bank keeps the required reserve and then loans out the remaining balance to a qualified borrower named Malik as a portion of his small business loan. Malik uses the loan to buy a tractor for his construction business and makes small monthly payments to the bank to payback the principal balance plus interest on the loan. The bank profits from a portion of the interest payment received and also passes some of the interest back to Carla in the form of an interest payment to her savings account. In this example, the bank is acting ________.

Answer 1

The answer is an intermediary between the saver and the borrower

Step-by-step explanation:

In this example, the bank is acting as an intermediary between the saver and the borrower.