Why banks are there in an economy-00417
This subjective question is related to the book/course
vu cs201 Introduction to Programming.
It can also be found in
vu cs201 Mid Term Solved Past Paper No. 11.
Question 1: Why banks are there in an economy?
Answer:
Banks monitor Stabilizes the Economy
Control the availability of money and credit in so it can keep low inflation, high growth, and stability of the financial system
A stable economy grows faster than an unstable one so bank plays vital role. Banks mitigate risk by taking deposits from a large number of clients and make numerous of loans , thus giving each depositor a small stake in each of the loans. So it provide economic of scale.
