Direct Finance Occurs When

question 43

Multiple Choice

Direct finance occurs when

• A) savers go directly to borrowers for funds.
• B) borrowers deposit funds into banks,which then loan these funds to savers.
• C) savers deposit funds into banks,which then loan these funds to borrowers.
• D) borrowers go directly to savers for funds.
• E) banks get involved with financing.

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Definitions:

Unconsummated Transaction

A trade or deal that has been agreed upon in principle but has not been finalized or executed.

Levied

The act of imposing a tax, fee, or fine.

Surplus Created

The excess of production or supply over demand, resulting in a situation where the quantity of goods exceeds the quantity needed or demanded.

Purchase

The act of buying goods or services; the transaction process through which a buyer acquires products or services in exchange for money.