The following figure plots real interest rate against quantity of credit.

-Refer to the figure above.Without a credit market such as that pictured,________.

Question

The following figure plots real interest rate against quantity of credit.
 
-Refer to the figure above.Without a credit market such as that pictured,________.

Quizplus · Accepted Answer

Without a credit market, resources would be allocated less efficiently because credit markets facilitate the transfer of funds from savers to borrowers, optimizing the use of resources for investment and consumption.

The Following Figure Plots Real Interest Rate Against Quantity of Credit