The lack of a smoothly functioning secondary market will ______ the financing of planned deficits in the primary market and thus have _______ affect on investment and economic growth over time.
A)enhance, an adverse
B)inhibit, an adverse
C)enhance, a positive
D)inhibit, a positive

Question

Quizplus · Accepted Answer

A smoothly functioning secondary market allows investors to buy and sell securities, providing liquidity and ease of investment. Without this, investors may be less willing to participate in the primary market, making it harder for governments to finance deficits. This can have an inhibiting effect on investment and economic growth over time. Therefore, option B - inhibit, an adverse - is the best answer.

The Lack of a Smoothly Functioning Secondary Market Will ______