What are the two basic ways in which funds flow through the financial system from lender–savers to borrower–spenders?

Question:

What are the two basic ways in which funds flow through the financial system from lender–savers to borrower–spenders?

Answer:

There are two basic mechanisms by which funds flow through the financial system:
(1)         Funds can flow directly through financial markets, and

(2)         Funds can flow indirectly through financial institutions.

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