If Financial Intermediaries Did Not Have the Ability to Pool

question 64

Multiple Choice

If financial intermediaries did not have the ability to pool the resources of small savers:

• A) borrowers needing large amounts of money would find it more costly to obtain the funds.
• B) the economy would grow faster.
• C) people would likely save more.
• D) the risk associated with lending would decrease.

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Definitions:

Normal Probability Distribution

A standard normal distribution, often used in statistics to represent real-valued random variables of unknown distributions.

Standard Deviation

A criteria used to determine the amount of spread or variation among a group of data values.

Negative Value

A number that is less than zero.

Standard Normal Distribution

A probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean, typically represented with a mean of 0 and a standard deviation of 1.