Well-functioning financial markets
A)cause inflation.
B)eliminate the need for indirect finance.
C)cause financial crises.
D)allow the economy to operate more efficiently.

Question

Quizplus · Accepted Answer

Well-functioning financial markets allow for the efficient allocation of capital, which can lead to increased economic activity and growth. This can ultimately improve overall economic efficiency. A, B, and C are incorrect as financial markets do not directly cause inflation, do not eliminate the need for indirect finance, and may be a contributing factor to financial crises if they are not functioning properly.

Well-Functioning Financial Markets