Institutions serving as links between surplus and deficit units can be identified as
Answer Details
Financial intermediaries serve as links between surplus and deficit units in an economy. These intermediaries include banks, credit unions, and other financial institutions.
When there is surplus money in the economy, individuals and businesses deposit the excess funds with financial intermediaries. These intermediaries then pool these funds together and make them available to deficit units, such as individuals or businesses in need of loans or financing.
Financial intermediaries play a crucial role in the economy by efficiently allocating funds from surplus units to deficit units. They match the needs of borrowers with the resources of savers, helping to facilitate economic growth and development.
Tax officers and pension offices, on the other hand, do not serve as direct links between surplus and deficit units. Tax officers collect taxes for the government, while pension offices manage pension funds for retired individuals. Although these entities may indirectly impact the allocation of funds in the economy, their primary roles are different from that of financial intermediaries.
Acceptance houses are also not direct links between surplus and deficit units. Acceptance houses provide short-term financing through the purchase of bills of exchange. While they play a role in facilitating trade between businesses, their function is more specific and limited compared to the broader role of financial intermediaries.
In summary, financial intermediaries such as banks and credit unions serve as the primary links between surplus and deficit units in an economy. They gather surplus funds from savers and make them available to borrowers, thereby promoting the efficient allocation of resources.