Which of the following statements is not true?
A) Financial and intermediated markets are conduits through which funds are channeled.
B) Borrower-spenders benefit from financial and intermediated markets because they earn interest or dividends on their funds.
C) Without financial and intermediated markets, savers would have no choice but to hoard their excess money.
D) When funds flow through intermediaries, the process is indirect.

Question

Quizplus · Accepted Answer

Borrower-spenders do not earn interest or dividends on their funds; instead, they pay interest or dividends to those from whom they borrow or to whom they issue equity. This statement incorrectly describes the benefit to borrower-spenders, as they are the ones who incur costs for accessing funds, not receive earnings from them.

Which of the Following Statements Is Not True