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:

Implicit Collusion

An understanding or arrangement among competitors where they cooperate indirectly by making similar business decisions without explicit agreement.

Cartel Activities

Actions taken by a group of independent market participants who collude to raise prices, limit supply, or control markets in some other way.

Sherman Act

A landmark federal statute in the field of United States antitrust law passed in 1890 that prohibits monopolistic practices and promotes competition.

Antitrust Laws

Legislation intended to promote competition and prevent monopolies and unfair business practices.