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In the circular flow of income and spending, financial institutions … [1] act as an intermediary between those who have surplus funds and those who have deficit funds. [2] are not always useful, as households
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In the circular flow of income and spending, financial institutions …

[1] act as an intermediary between those who have surplus funds and those who have deficit funds.
[2] are not always useful, as households generally spend all their available funds.
[3] create an injection into the flow by collecting savings from participants with surplus units only; therefore, there is no need to provide funds to deficit units.
[4] generally exist to collect investment spending and transform it into savings.

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Answer:

1] act as an intermediary between those who have surplus funds and those who have deficit funds.

Step-by-step explanation:

User Majenko
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