services to consumers, businesses, and government units. A Preview of the Financial System * If the financial system is competitive, the interest rate the bank pays on CDs will be at or near the highest rat that you can earn on CDs of similar maturity and risk * Banks and other depository institutions, such as insurance companies, gather money from consumers in small dollar amounts, aggregate it, and then make loans in much larger dollar amounts. * An important function of the financial…
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