14 of 2114 of 21 Items Question The financial markets play an important role in channeling funds from savers to borrowers. Which of the following illustrates this function of financial markets?(1 point) Responses Investors purchase capital goods which are used in production by borrowers. Investors withdraw money from their savings accounts. Investors purchase capital goods which are used in production by borrowers. Investors withdraw money from their savings accounts. Investors deposit funds into interest-bearing accounts which are then loaned to borrowers. Investors deposit funds into interest-bearing accounts which are then loaned to borrowers. Investors purchase assets like real estate and gold from other investors. Investors purchase assets like real estate and gold from other investors. Investors purchase securities stocks that are issued by firms and governments.
1 answer
The response that best illustrates the function of financial markets in channeling funds from savers to borrowers is:
Investors deposit funds into interest-bearing accounts which are then loaned to borrowers.
This option clearly demonstrates how funds from savers (investors) are collected by financial institutions and subsequently lent to borrowers, fulfilling the critical role of financial markets in the economy.
