Podcast
Questions and Answers
What is the financial intermediation process known as when funds are channeled through financial institutions?
What is the financial intermediation process known as when funds are channeled through financial institutions?
- Market-based finance
- Capital investment
- Direct finance
- Indirect finance (correct)
Which of the following statements is true about indirect finance?
Which of the following statements is true about indirect finance?
- It involves direct lending between two parties.
- It involves a financial intermediation process through institutions. (correct)
- It bypasses financial institutions.
- It promotes economic growth but does not involve financial intermediaries.
How does the financial system benefit the side with a surplus of funds?
How does the financial system benefit the side with a surplus of funds?
- By providing investment opportunities (correct)
- By generating profits through investments
- By reducing savings interest rates
- By promoting economic growth
What is the primary benefit of new investments according to the text?
What is the primary benefit of new investments according to the text?
In the circular flow of expenditures and income, what does GDP stand for?
In the circular flow of expenditures and income, what does GDP stand for?
Which route involves a direct connection between savers and borrowers without any intermediary?
Which route involves a direct connection between savers and borrowers without any intermediary?
What role do financial intermediaries play in indirect finance?
What role do financial intermediaries play in indirect finance?
How do market-based finance systems differ from indirect finance systems?
How do market-based finance systems differ from indirect finance systems?
What effect do new investments have on the economy according to the text?
What effect do new investments have on the economy according to the text?
What is the primary function of financial institutions in the economy?
What is the primary function of financial institutions in the economy?
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