Savers May Prefer to Use Financial Intermediaries Rather Than Lending

question 59

Multiple Choice

Savers may prefer to use financial intermediaries rather than lending directly to borrowers because financial intermediaries:

• A)reduce the cost of gathering information about borrowers.
• B)have a monopoly on lending.
• C)increase the risk of lending.
• D)offer higher rates of return than available elsewhere.

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Definitions:

Osmosis

The movement of water molecules through a semipermeable membrane from a region of lower solute concentration to higher concentration.

Sink Cells

Cells that act as repositories for the products of photosynthesis or other metabolic activities, often located in different parts of a plant.

Sugars

Simple carbohydrates with a sweet taste, essential for energy in living organisms, and serve as building blocks for more complex carbohydrates.

Humus

Partially decayed organic material in soil.