When the Financial System Has Achieved a High Degree of Efficiency

question 86

Multiple Choice

When the financial system has achieved a high degree of efficiency,

• A) Borrowers are able to finance at the highest possible cost.
• B) Surplus spending units are able to receive the lowest return on their savings.
• C) Transaction and intermediation costs are low.
• D) Lenders will have a limited choice of financial investments.

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Definitions:

Certify

To officially recognize, verify, or endorse a particular status, qualification, or fact.

Bank

A financial institution licensed to receive deposits and make loans, and may offer various other financial services, like wealth management, currency exchange, and safe deposit boxes.

Substantially Impair

A legal term describing conditions where the value, use, or function of something is significantly decreased or hindered.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize and harmonize the law among different jurisdictions.