Final answer:
Banks act as financial intermediaries and provide benefits such as lower transaction costs, easier access to funds, and increased safety.
Step-by-step explanation:
Financial intermediaries, such as banks, provide several benefits:
- Lower transaction costs: Banks facilitate the process of lending and borrowing money, reducing the costs associated with finding a lender or a borrower.
- Easier access to funds: Banks provide a centralized location for individuals and businesses to save money and borrow money.
- Increased safety: Banks offer a secure environment for storing and protecting savings.
These benefits make financial intermediaries essential in facilitating economic activity and making financial transactions safer and more efficient.