5 Questions
What is the primary role of financial intermediaries?
To channelize funds from lenders to borrowers
What is financial intermediation?
A productive activity that incurs liabilities to acquire financial assets
What is a financial establishment primarily engaged in?
Financial intermediation and auxiliary financial activities
What do financial intermediaries do to facilitate financial transactions?
They intermediate between lenders and borrowers
What is the outcome of financial intermediation?
The channeling of funds from lenders to borrowers
Study Notes
Financial Establishment
- A financial establishment is a type of servicing establishment that primarily engages in financial intermediation or auxiliary financial activities closely related to financial intermediation.
Financial Intermediation
- Financial intermediation is a productive activity where an institutional unit incurs liabilities to acquire financial assets through market transactions.
- The primary goal of financial intermediation is to channel funds from lenders to borrowers.
Role of Financial Intermediaries
- Financial intermediaries play a crucial role in facilitating transactions between lenders and borrowers.
This quiz covers the concept of financial establishments, including their role in financial intermediation and auxiliary activities related to financial transactions.
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