Financial intermediation can break down as a result of:
A) low inflation.
B) stable inflation.
C) government controls on interest rates.
D) private ownership of banks.

Question

Quizplus · Accepted Answer

Government controls on interest rates can limit the ability of financial intermediaries to lend and borrow funds, which can lead to a breakdown in the flow of funds through the financial system. Low or stable inflation and private ownership of banks do not necessarily lead to a breakdown in financial intermediation.

Financial Intermediation Can Break Down as a Result Of