Why Do Financial Intermediaries Provide the Public with a Wide

question 81

Multiple Choice

Why do financial intermediaries provide the public with a wide range of financial services?

• A)because intermediaries are required by law to do so
• B)because intermediaries are, by and large, profit seeking
• C)because intermediaries just like to make people happy
• D)because intermediaries are better at appraising the risk of default associated with lending to particular borrowers

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Definitions:

Factor Endowment Theory

An economic theory that suggests a country's trade patterns are primarily determined by its factor endowments, such as land, labor, and capital, rather than its productivity levels.

Production Factors

Production factors, also known as factors of production, are the inputs needed for the creation of a good or service, usually categorized into land, labor, capital, and entrepreneurship.

Exports

Goods or services produced in one country and sold to buyers in another, contributing to international trade.

Global Trade Flow

Refers to the movement of goods and services across international borders, involving various economic activities and exchanges between countries.