The following functions, provided by financial intermediaries, enable the smooth functioning of the economy:
I.processing of payments;
II.borrowing and lending;
III.pooling risks
A)I only
B)I and II only
C)I, II, and III
D)III only

Question

Quizplus · Accepted Answer

Processing of payments allows transactions to occur efficiently and quickly, which is essential in a modern economy. Borrowing and lending allows for consumption smoothing over time, by allowing individuals and businesses to borrow money when they need it and pay it back with interest over time. Pooling risks allows for risk reduction through diversification by combining the risks of multiple individuals or businesses. All three functions are critical in enabling the smooth functioning of the economy.

The Following Functions, Provided by Financial Intermediaries, Enable the Smooth