Institutions serving as links between surplus and deficit units can be identified as

1. Analyze the question The question asks for the institutions that connect surplus units (people or organisations with more money than they need, such as savers and investors) with deficit units (those who need funds, such as borrowers and businesses).

2. Explain the concept Financial intermediaries are institutions that collect funds from savers and lend them to borrowers. Examples in Nigeria include commercial banks, microfinance banks, insurance companies, and finance houses. They do three main things:

• Mobilise savings from surplus units.
• Channel those funds as loans or investments to deficit units.
• Reduce risk and the cost of finding lenders or borrowers.

3. Step-by-step solution

• A. Tax officers: They collect government revenue and do not link savers with borrowers. ✗
• B. Pension offices: They manage retirement funds for contributors. They do hold funds, but their main role is retirement benefits, not general intermediation. ✗
• C. Financial intermediaries ("intermediates" in the question): This is exactly the definition, since they link surplus units and deficit units. ✓
• D. Acceptance houses: They specialise in accepting bills of exchange, which guarantees payment on trade bills. This is a narrow function in the money market, not the general linking role. ✗

4. Answer The correct option is C. financial intermediates (the question's spelling of "financial intermediaries").

5. Exam tip Link the words: surplus → intermediary → deficit. When a question mentions bridging savers and borrowers, think "financial intermediary". Also note that the options often use near-correct institutions (such as acceptance houses) to distract you, so choose the broadest, most direct definition.