Which of the Following Is NOT a Role or Function

question 89

Multiple Choice

Which of the following is NOT a role or function of financial intermediaries?

• A) they always channel funds to receive low but safe returns
• B) they are involved in maturity transformation
• C) they can reduce risk involved in lending money
• D) they improve allocative efficiency in the economy

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Definitions:

Disposable Income

The net income available to households or individuals after accounting for taxes, which can be spent on consumption or savings.

Consumption

The use of goods and services by households, one of the primary components that determine the overall level of economic activity in an economy.

Billion

A numerical value represented as 1,000 million (1,000,000,000) in the short scale, commonly used in financial and demographic statistics.

MPS

The marginal propensity to save, which is the proportion of an additional unit of income that is saved rather than spent.