Which of the Following Statements Is True

question 59

Multiple Choice

Which of the following statements is true?

• A)In a world without financial intermediaries the level of fund flows between household savers and the corporate sector is likely to be as high as it is with financial intermediaries.
• B)In a world without financial intermediaries funds would directly flow from surplus units to deficit units.
• C)In a world without financial intermediaries lenders (households) would need to monitor the actions of the firms to which they have lent their funds.
• D)In a world without financial intermediaries funds would directly flow from surplus units to deficit units and lenders (households) would need to monitor the actions of the firms to which they have lent their funds.

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Definitions:

Contributory Program

A social program financed through the contributions of its participants, often via taxes or premiums, providing benefits based on those contributions.

Social Security

A government program that provides financial assistance to people who are retired, disabled, or otherwise eligible for benefits based on their earnings records.

Income Percentage

The proportion of a person's or entity's income relative to a specific benchmark or total income, often used in financial analysis and planning.

Shadow Welfare State

A term describing indirect government social welfare policies implemented through tax breaks, subsidies, and other means not directly recognized as social welfare spending.