Question

the banking industrygroup of answer choicesexists primarily to mediate the asymmetric information problem between saver-lenders and borrower-spenders.is subject to more regulations and governmental costs than the money markets.should have an efficiency advantage in gathering information that would eliminate the need for the money markets.all of the above are true.

Answer 1

Banks act as financial intermediaries, reducing transaction costs and facilitating the exchange of goods and services in the payment system. They make transactions safer and are crucial in money creation.

Step-by-step explanation:

Banks play a fundamental role as financial intermediaries in the economy, facilitating transactions between savers and borrowers and reducing transaction costs. They operate within an efficient payment system, enabling the exchange of goods and services for money or other financial assets.

By holding deposits from savers and extending loans to borrowers, banks lower the costs associated with finding a lender or a borrower, while also making these transactions safer and more reliable. Additionally, banks are instrumental in the process of creating money by lending out the deposits they receive.