The Main Role of Financial Intermediaries Is to

question 35

Multiple Choice

The main role of financial intermediaries is to

• A)provide funds to the federal government to cover the budget deficit.
• B)borrow funds from savers and lend them to borrowers.
• C)provide advice to consumers on how they should handle their finances.
• D)help ensure that there is enough money in circulation.

Understand the concept of market efficiency and how externalities affect market outcomes.

Identify and evaluate policies for correcting market failures due to externalities, including taxes, subsidies, and tradeable permits.

Analyze the impact of government intervention on market equilibrium, including taxes and subsidies.

Understand the marginal social cost and marginal social benefit within the context of externalities.