The financial markets perform the important role of channeling funds from _____ to _______.
A)net lenders, net borrowers
B)net borrowers, net lenders
C)gross lenders, gross borrowers
D)gross borrowers, gross lenders

Question

Quizplus · Accepted Answer

Financial markets enable individuals and institutions with surplus funds (net lenders) to channel them to those who need them (net borrowers) in order to make investments, purchase assets, or meet other financial obligations. This helps to allocate resources more efficiently within the economy. Therefore, option A is the correct choice as it correctly identifies the direction of flow of funds in financial markets.

The Financial Markets Perform the Important Role of Channeling Funds