Which of the Following Statements Most Correctly Describes the Process

question 141

Multiple Choice

Which of the following statements most correctly describes the process of capital formation?

• A)In a highly developed economy,capital formation takes place directly.
• B)Capital formation takes place whenever resources are used to produce building,machinery,and other equipment to be used in the production of goods for consumer use.
• C)The direct process of capital formation can work only if the proper legal instruments and financial intermediaries exist.
• D)All of the above statements are correct.

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Definitions:

M1 Money Supply

A category of money supply that includes all physical money like coins and currency, as well as demand deposits and other liquid assets held by the central bank.

Fed

The Federal Reserve System, often referred to as the Fed, is the central banking system of the United States, which oversees the nation's monetary policy by regulating banking institutions, stabilizing the financial system, and managing inflation and employment levels.

Checkable Deposits

Bank account balances that can be withdrawn using checks or electronic debit, typically found in checking accounts.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances in bank accounts.