Banks and Other Financial Institutions

Multiple Choice

Banks and other financial institutions

A) are the primary investors in equipment, factories, and other capital goods.
B) lack relevance in the modern economy because they focus primarily on financial assets and generally do not engage in real investment activity.
C) promote economic growth by helping to direct household savings to businesses that want to invest.
D) often hinder economic activity by creating barriers between household savers and firms wanting to invest in capital goods.