When the financial system has achieved a high degree of efficiency,
A) Borrowers are able to finance at the highest possible cost.
B) Surplus spending units are able to receive the lowest return on their savings.
C) Transaction and intermediation costs are low.
D) Lenders will have a limited choice of financial investments.

Question

Quizplus · Accepted Answer

A high degree of efficiency in the financial system means that transaction and intermediation costs are minimized, allowing for more effective allocation of resources.

When the Financial System Has Achieved a High Degree of Efficiency