Question

Which of the following is an example of a facilitating function that intermediaries perform?

A)Transporting goods to customers
B)Purchasing goods for resale
C)Transacting with potential customers
D)Extending credit to customers
E)Maintaining inventory

Answer 1

Extending credit to customers is an example of a facilitating function performed by intermediaries such as banks and finance companies, who bridge the gap between savers and borrowers in the economy.

Step-by-step explanation:

An example of a facilitating function that intermediaries perform is extending credit to customers. Financial and non-financial intermediaries, like banks and finance companies, help facilitate transactions in the economy by lowering transaction costs and offering services like credit. These intermediaries act as a bridge between savers who deposit their funds and borrowers who receive loans, providing a convenient and safer way for economic exchange.

Institutions like Bank of America Merrill Lynch Dealer Financial Services, Chase Auto Finance, and Ford Motor Credit Company are examples of finance companies that allow merchants to sell their installment contracts, aiding in instant credit provision without merchants having to carry loans full term.