Financial Intermediation Is the Process in Which

question 116

Multiple Choice

Financial intermediation is the process in which:

• A)the Federal Reserve establishes the prime rate
• B)discount rates are interpreted
• C)savings are automatically deducted from checking accounts
• D)financial institutions act as intermediaries between the suppliers and demanders of funds
• E)the Financial Reserve controls the supply of money

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Definitions:

Public Goods

Goods or services that are non-excludable and non-rivalrous, meaning they can be used by everyone without diminishing their availability to others, such as public parks or national defense.

Private Firms

Businesses that are privately owned, not traded publicly on stock exchanges, and typically managed by the owner or shareholders.

Public Good

Without profit motive, a product or service is made available to all societal members, courtesy of either governmental or private benefactors.

Nonrivalry

A characteristic of a good or service whereby its consumption by one individual does not reduce its availability for consumption by others.