The flow of funds through financial markets increases the volume of savings and investment by:
A) maintaining low interest rates.
B) storing large quantities of cash.
C) providing savers with a variety of ways to lend to borrowers.
D) offering lower interest rates than could be obtained directly from borrowers.

Question

Quizplus · Accepted Answer

Financial markets provide savers with a variety of ways to lend to borrowers, increasing the volume of savings and investment. This is because savers have more opportunities to invest their money and borrowers have more access to funding, which can lead to more investment and economic growth. Therefore, choice C is the best answer. Choices A, B, and D are incorrect because they do not accurately describe how financial markets increase the volume of savings and investment.

The Flow of Funds Through Financial Markets Increases the Volume