Describe the different ways capital can be transferred from suppliers of capital to those who are demanding capital.

1) Through Financial Intermediary

2) Through Issuing of Bonds

3 Through Issuance of stocks

Explanation:

1) One of the ways capital can be transferred from suppliers of capital to those who are demanding capital is through a financial intermediary like a bank. Suppliers of capital can deposit their money in a bank and earn interest on that, and the bank being a financial intermediary can loan out that money to those demanding the capital and earn an interest.

2) Institutions which are demanding capital can issue bonds to transfer capital from suppliers to the people who are demanding capital. An example of this is the T-Bills that the government issues, in this case the government is demanding capital so it issues T Bills, and other institutions or people who are suppliers of capital buy the T bills by paying the government. This is another way capital is transferred.

3) When companies require capital they go public and issue stocks, by doing this they are selling a part of the ownership of the company and getting capital in return, for example if a car manufacturer required cash/capital it can offer an IPO also known as a initial public offering, in which it will sell it's shares for money. This way the investors who are suppliers of capital transfer their capital to the car manufacturing company which is demanding capital.

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