Disintermediation Occurs When Funds Are Deposited into Banks and Lent

question 63

True/False

Disintermediation occurs when funds are deposited into banks and lent to borrowers.

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Definitions:

Capital

Resources, including financial assets, equipment, and buildings, used to produce goods and services.

Capital Goods

Long-lasting goods that are used in the production of other goods and services, such as machinery, buildings, and equipment.

Consumables

Items or products that are intended to be used up and replaced.

Inflationary Premium

The component of interest rates or yields on financial instruments that compensates investors for the anticipated erosion of purchasing power due to inflation.