Which of the Following Statements Is Most Correct

question 138

Multiple Choice

Which of the following statements is most correct?

• A)Contractual savings include such things as accumulation of reserves in insurance and pension funds and deposits to time and savings accounts in commercial banks.
• B)As savings increased in the United States, there was a change in our status from a creditor nation to a debtor nation.
• C)In the U.S.economy, financial assets and financial liabilities are created when balancing savings surplus and savings deficit units.
• D)Corporate bonds and stocks are said to be indirect securities, while commercial bank time deposits would represent primary instruments in terms of the savings investment process.

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Definitions:

Loanable Funds

The market where savers supply funds to borrowers, often facilitated by financial institutions, influencing interest rates through supply and demand.

Interest Rate

The proportion of interest a borrower is charged for borrowing money from a lender.

Investment Spending

Expenditures made by entities (individuals, companies, or governments) on capital goods, including buildings, machinery, and technology, to increase productivity.

Saving Incentives

Financial or policy incentives designed to encourage individuals or companies to save money rather than spend it.