The Process of Financial Intermediation

question 15

Multiple Choice

The process of financial intermediation:

• A) creates a net cost to an economy.
• B) increases the economy's ability to produce.
• C) is always used when a borrower needs to obtain funds.
• D) is used primarily in underdeveloped countries.

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Definitions:

Cyclical Unemployment

Unemployment that results from business cycle fluctuations in economic activity, particularly downturns, rather than from changes in the workforce or skill mismatches.

Long Run

A period where all factors of production and costs are variable and no inputs are fixed.

Unemployment

The condition of being jobless and actively seeking employment, reflecting the number of people in the workforce unable to find jobs.

Government Measure

Actions or initiatives taken by a government to regulate, control, or influence a particular aspect of the economy or society.