The way that banks earn profit is through banking fees and interest payments on the loans they give out.
Individuals would use a bank to save their money.
Businesses can use banks to get loans to expand the business.
The Federal Reserve is the central bank of the United States.
When there is more money in supply, businesses and people will have more money to spend on goods and services. The reverse is true.
Banking affects money supply by increasing the amount of money in circulation when they create loans.
What is the purpose of banks?
Banks are very important in the financial system because they make loans which then create money for businesses and people to spend.
Banks are able to make their own profit when they gain interest from the loans they make. Their activities are monitored by the Federal Reserve which is the central banking system of the United States.
Find out more on the Federal Reserve at brainly.com/question/7798250.
