The task of the financial system
Answer to Problem 1MCQ
From the available options, the correct option is decreasing transaction costs.
Explanation of Solution
Decreasing transaction costs and risks is a task of the financial system because it facilitates to transfer funds with lowest cost and provide security to funds which are deposited in the institutions. And, this system does not increase the risk and inefficiencies whereas, it creates liquidity and does not offer capital outflow to move assets from the country.
Therefore, correct option is a (decreasing transaction costs) and all other options are incorrect.
Introduction: Financial system refers to the set of financial institutions that offers exchange of funds, insurance, and deposits such as banks, insurance companies, etc.
Chapter 22 Solutions
Krugman's Economics For The Ap® Course
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education