Which is the Correct Order of Entities That Benefit When Banks Make a Profit?
When banks make a profit, shareholders benefit through dividends, companies receive financial support for expansion, leading to job creation and economic growth.
by Sai V
Updated Oct 27, 2023
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Which is the Correct Order of Entities That Benefit When Banks Make a Profit?
A. Employees, Shareholders, and the Economy
B. Shareholders, Shoppers, and the Economy
C. Employees, Companies, and the Economy
D. Shareholders, Companies, and the Economy
The correct answer is: D. Shareholders, Companies, and the Economy.
When banks make a profit, shareholders are the first to benefit through dividends. The remaining profit is often used to provide loans to companies, enabling them to expand their operations. This expansion creates job opportunities and stimulates economic growth, benefiting both employees and the overall economy. Therefore, shareholders benefit directly, companies benefit from financial support, and the economy thrives due to increased employment and business activity.
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