Which type of bank primarily receives, transfers, and lends money to individuals, businesses, and government entities?

The correct answer is commercial banks because these financial institutions are specifically designed to provide a wide range of banking services to individuals, businesses, and governments. Commercial banks accept deposits, which allows them to lend money to customers for various purposes, such as financing a home, business expansion, or other personal loans. They facilitate money transfers and act as intermediaries in the financial system, promoting economic activity by providing the necessary capital for growth.

While credit unions serve a similar purpose, they are member-owned and often focus on serving specific communities or groups rather than the broader market. Depository financial institutions is a more general term that encompasses a variety of banks, including commercial banks, and does not accurately specify the primary functions associated with commercial banks. Retail banks specifically focus on individual consumers rather than businesses and governments as a primary focus. Thus, commercial banks stand out as the institutions that comprehensively fulfill the role of receiving, transferring, and lending money across a wide spectrum.