The process of indirect finance using financial intermediaries is called
A)direct lending.
B)financial intermediation.
C)resource allocation.
D)financial liquidation.

Question

Quizplus · Accepted Answer

Financial intermediation is the process of indirect finance, where financial intermediaries such as banks and other financial institutions collect money from savers and lend it to borrowers. This process helps to allocate funds efficiently by matching the needs of borrowers with the savings of investors. Direct lending (A) refers to lending money to borrowers without any intermediary. Resource allocation (C) is a broader concept that refers to the distribution of resources in an economy, and financial intermediation is just one aspect of this. Financial liquidation (D) refers to selling off financial assets to raise cash, and is unrelated to the process of indirect finance using financial intermediaries.

The Process of Indirect Finance Using Financial Intermediaries Is Called