Asked by Morris Mwendwa on Jun 17, 2024
Verified
In the capital market, households ________ savings and firms ________ funds.
A) demand; supply
B) demand; demand
C) supply; supply
D) supply; demand
Capital Market
Refers to financial markets where long-term debt or equity-backed securities are bought and sold.
Households
The basic units of consumer decision-making in economics, often consisting of individuals or groups of people living together making joint economic decisions.
Funds
Funds refer to financial resources allocated for a specific purpose, such as investment or expenses.
- Distinguish between households and firms in terms of supply and demand in the capital market.
Verified Answer
KA
Kristen AndersonJun 20, 2024
Final Answer :
D
Explanation :
In the capital market, households supply savings because they are looking to invest or deposit their excess income. Firms demand funds because they often need to borrow money to invest in new projects, expand operations, or cover operational costs.
Learning Objectives
- Distinguish between households and firms in terms of supply and demand in the capital market.