Joe has just borrowed $5,000 from his aunt in order to make a down payment on a car.This borrowing transaction is an example of
A)indirect intermediation.
B)direct intermediation.
C)external intermediation.
D)market transaction.

Question

Quizplus · Accepted Answer

Direct intermediation refers to the process of obtaining funds directly from a lender without involving any financial institution or intermediary. In this case, Joe has directly borrowed $5,000 from his aunt without involving any bank or other financial institution. Hence, this transaction is an example of direct intermediation.

Joe Has Just Borrowed $5,000 from His Aunt in Order