Financial intermediaries are best described as:
a. informal institutions that provide funds to the government to manage budget deficits.
b. institutions that accept deposits and make loans.
c. institutions that control the money supply in the economy.
d. institutions that provide financial aid to foreign countries.
e. individuals who manage other's investment portfolios.
b
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At the time of the South Korean financial crisis, the government allowed many chaebol owned finance companies to convert to merchant banks. Finance companies ________ allowed to borrow abroad and merchant banks ________
A) were not; could borrow abroad B) were not; could not borrow abroad C) were; could borrow abroad D) were; could not borrow abroad
As a result of financial deregulation
A) the IS curve became flatter and the LM curve became steeper, with the result that the interest rate became more volatile. B) the IS curve became steeper and the LM curve became flatter, with the result that the interest rate became more volatile. C) both the IS curve and the LM curve became steeper, with the result that the interest rate became more volatile. D) both the IS curve and the LM curve became flatter, with the result that the interest rate became more volatile.