Which of the Following Is an Example of the Way

question 233

Multiple Choice

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

• A)Even when entrepreneurs cannot secure sufficient funding for projects from banks,venture capital firms may be willing to lend money.
• B)The level of legal protection for investors in the United States is relatively low.
• C)Because the financial market in the United States is so large,the quantity of trading in corporate stocks and bonds makes those investments less liquid.
• D)Banks in the United States are more willing to take on risk because the government guarantees each bank cannot lose more than $100,000 on any given loan that defaults.

---

Definitions:

Purchasing Power

The ability of an individual, firm, or group to purchase goods and services with a given unit of currency.

Price Level

The average cost across all sectors of goods and services produced in the economy.

Percent

A mathematical term describing a fraction or ratio as parts per hundred, used to indicate proportions and changes in quantities.

Deflation

A decline in the general price level of goods and services, often indicating a reduction in the supply of money and credit in the economy.