An International Monetary Fund Factsheet made the following observation regarding sound f inancial systems: A countrys financial
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An International Monetary Fund Factsheet made the following observation regarding sound f inancial systems: “A country’s financial system . . . help[s] channel savings into investment, thereby supporting economic growth.”
a. Briefly explain how the financial system channels savings into investment. Aren’t savings already investment? If not, what type of investment is the Factsheet referring to?
b. How does channeling savings into investment support economic growth?
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a The financial system channels savings into investment by facilitating the flow of funds from savers to borrowers While savings represent money that ...View the full answer
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