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Chapter 15: Q.21 (page 347)

Does Figure 15-3 depict direct finance or indirect finance? Explain. How could the figure be revised to illustrate the alternative form of finance?

Short Answer

Expert verified

The figure depicts indirect finance

Step by step solution

01

introduction

Valuable open doors for loaning and acquiring emerge when there is a jumble between the wages and uses of various areas of the economy.

02

explanation

Extreme moneylenders, for example, families, organizations and states place their investment funds with monetary middle people, for example, business banks, common assets and so forth. These monetary go-betweens, thus, loan to extreme borrowers like families, organizations and legislatures. Since extreme loan specialists don't loan straightforwardly to extreme borrowers, the figure portrays aberrant money.

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