Which of the Following Is Not One of the Eight

question 22

Multiple Choice

Which of the following is not one of the eight basic puzzles about financial structure?

• A) Debt contracts are typically extremely complicated legal documents that place substantial restrictions on the behavior of the borrower.
• B) Indirect finance, which involves the activities of financial intermediaries, is many times more important than direct finance, in which businesses raise funds directly from lenders in financial markets.
• C) Collateral is a prevalent feature of debt contracts for both households and business.
• D) There is very little regulation of the financial system.

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Definitions:

Validity

Refers to the extent to which a concept, conclusion, or measurement is well-founded and likely corresponds accurately to the real world.

Reliability

A measure of the consistency or repeatability of test scores or measurements over time.

Measures

Quantitative indicators or tools used to assess, count, or describe a phenomenon.

Supposed

Assumed or believed to be the case based on evidence or reasonable grounds.