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Q16. How do financial institutions make money? Explain.

Q17. Explain why the Electricity Commission is important.

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Final answer:

Financial institutions make a profit by lending at a higher rate than they borrow, accepting deposits from savers and providing loans to borrowers. This process generates profits through the interest rate difference.


Explanation:

Financial institutions make a profit by lending money at a higher rate than they borrow. They accept deposits from savers and lend to borrowers at a higher interest rate, generating profits. For example, banks offer loans to individuals or businesses at a higher interest rate than what they offer on savings accounts.

  • Interest rates
  • Deposits vs. loans
  • Financial intermediaries

Learn more about Financial institutions and profit-making here:

https://brainly.com/question/32464757


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