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Q: What is the primary function of banks in the macro economy? How do banks facilitate the circular flow?
A: The primary function of banks is to put their account holders' money to use by lending it out to others who can then use it to buy homes, businesses, send kids to college... Banks create money in the economy by making loans.
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User: What is the primary function of banks in the macro economy? How do banks facilitate the circular flow?





Weegy: In economics, the terms circular flow of income or circular flow refer to a simple economic model which describes the reciprocal circulation of income between producers and consumers.[1][2] In the circular flow model, [ the inter-dependent entities of producer and consumer are referred to as "firms" and "households" respectively and provide each other with factors in order to facilitate the flow of income.[1] Firms provide consumers with goods and services in exchange for consumer expenditure and "factors of production" from households. More complete and realistic circular flow models are more complex. They would explicitly include the roles of government and financial markets, along with imports and exports ]
Expert answered|denice|Points 40|



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Asked 1/2/2013 2:23:42 PM
Updated 1/3/2013 11:15:20 AM
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The primary function of banks is to put their account holders' money to use by lending it out to others who can then use it to buy homes, businesses, send kids to college... Banks create money in the economy by making loans.
Added 1/3/2013 11:15:20 AM
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