Financial Markets Have the Basic Function of

question 11

Multiple Choice

Financial markets have the basic function of

• A)getting people with funds to lend together with people who want to borrow funds.
• B)assuring that the swings in the business cycle are less pronounced.
• C)assuring that governments need never resort to printing money.
• D)providing a risk-free repository of spending power.

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Definitions:

Variable Expenses

Expenditures that adjust in response to the operations of a company.

Transfer Price

A price charged for goods or services transferred between departments or divisions of the same company or between affiliated companies.

Valve Division

Refers to a specialized business unit within a company that focuses on the production and sales of valves.

Variable Expenses

costs that vary in total in direct proportion to changes in activity level or volume, such as materials costs or commission expenses.