Financial Intermediaries That Sell Shares to Savers and Use Their

question 72

Multiple Choice

Financial intermediaries that sell shares to savers and use their funds to buy diversified pools of assets are called:

• A) pension funds.
• B) insurance companies.
• C) mutual funds.
• D) commercial banks.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, typically represented by the area above the supply curve and below the market price.

Equilibrium Price

The market price at which the quantity of a good or service demanded equals the quantity supplied, balancing out buying and selling pressures.

Producer Surplus

Producer surplus is the difference between what producers are willing to accept for a good or service versus what they actually receive, reflecting gains from trade.

Consumer Surplus

The gap between the aggregate sum consumers are ready and can afford to pay for a good or service and the aggregate sum they actually spend.