Institution X is owned by shareholders. It accepts deposits from the public and uses some of these funds to provide loans to firms. A food producer applies to Institution X for a loan to buy new packaging machinery.
Name the type of financial institution described.
Explain how providing this loan could increase investment by the food producer.
82 exam-style questions on OCR GCSE Economics 2.8 The role of money and financial markets, covering 2.8.1 Money as a medium of exchange, 2.8.2 Role of the financial sector, 2.8.3 Importance of the financial sector, 2.8.4 Interest rates and saving, borrowing, investment, and 2.8.5 Effect of interest rate changes. Each one has a worked solution and a mark scheme showing where the marks go.