Final answer:
The banking system remains healthy through government intervention and competition, which ensure financial stability and promote efficiency in services. This interconnection of money, loans, and banks facilitates economic activities, and disruptions in this system can lead to recession or inflation. Option c.
Step-by-step explanation:
The two things that keep the banking system healthy are c. Government intervention and competition. Government intervention can take various forms, such as regulatory policies and monetary policy actions to ensure stability in the financial system. On the other hand, competition among banks can lead to better services and rates for consumers, as well as innovations within the industry.
Money, loans, and banks are closely connected within this framework. Deposits made by savers in banks are loaned out to individuals, businesses, and other banks, enabling economic activities and interactions. When this system functions smoothly, it supports economic growth and stability. However, if disruptions occur, such as loan defaults or mismanagement, they can lead to economic downturns or inflation. Therefore, a healthy balance of regulations and competitive practices is crucial for a robust banking sector.