As a first-year student, you need to borrow £40,000 in order to finance your university education. You intend to repay this loan over time after you graduate. Explain why seeking out an individual saver to borrow money from could be problematic. Then identify which service a bank provides to the economy that eliminates this problem. (b) Borrowing from the central bank or other banks is a short-term solution for a bank when it is illiquid. What do you think would be a more long-term solution if a bank is persistently illiquid?

Answer rating: 100% (QA)

a Seeking out an individual saver to borrow money from could be problematic for several reasons 1 Limited Funds Individual savers might not have enough funds to lend you the entire amount you need whi... View the full answer