Question

How do banks mediate between those
who have surplus money and those who
need money?​

Answer 1

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A bank mediates between those who have surplus money and those who need money by allowing both to open accounts with it. ... Those with surplus money are encouraged to invest with the bank and are paid a certain rate of interest for the same. Those who need loans are required to pay an interest on their loans.

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Answer 2

$\underline{\underline{\sf{Answer}}}$

⟹Banks use the major portion of deposits with them to extend loans to people who need money.

⟹There is a huge demand for loans for various economic activities.

⟹ Thus, by accepting deposits and by advancing loans, banks mediate between those who have surplus money and those who need money