In a competitive financial system
A) Surplus funds tend to get allocated to the highest valued uses through price rationing
B) Equilibrium does not ensure that surplus funds get allocated efficiently
C) The level of interest rates ensures that all projects of deficit units get funded
D) None of the above
Correct Answer:
Verified
Q2: Households
A) Are dis-savers in their early and
Q3: Businesses
A) Are deficit units because the profit-maximizing
Q4: State and local governments
A) Are chronic deficit
Q5: Commercial banks
A) Are surplus units
B) Are deficit
Q6: For the United States, the external sector
Q7: If funds supplied by surplus units exceeded
Q8: Lower financing costs (interest rates)
A) Encourage businesses
Q9: Which of the following is characteristic of
Q11: If government spending were to increase and
Q12: An effective financial system
A) Reallocates risk toward
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