What is the financial system and what is its purpose in the economy?
Thank you.|||It is a system made up of savers and borrowers. For example, bank holders and the bank themselves.
If you take out a bank CD, the bank will pay you interest for using your money. They may pay you 3%, but they will lend that money to someone else for 7%, keeping the 4%. That's how the bank makes their money.
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