One significance of commercial banks is that it facilitates payments for smooth flow of money within the economy.2 pointsTRUEFALSE

Answer to the Question

The statement is TRUE.

Explanation

1. Role of Commercial Banks: Commercial banks serve as intermediaries in the financial system, allowing for the efficient transfer of funds between borrowers and savers. One of their crucial functions is facilitating payments, which ensures a smooth flow of money within the economy.

2. Payment Systems: Commercial banks provide various payment systems, including checks, debit and credit cards, and electronic transfers. These systems help individuals and businesses to make transactions easily, promoting economic stability and growth.

Therefore, acknowledging that commercial banks facilitate payments is accurate and reflects their significance in maintaining the liquidity and functioning of the economy.