A stable financial system is capable of doing the following exceptQuestion 20Select one:a.assessing and managing financial risksb.efficiently disallocating resourcesc.eliminating relative price movements of real or financial assetsd.maintaining employment levels
Question
A stable financial system is capable of doing the following exceptQuestion 20Select one:a.assessing and managing financial risksb.efficiently disallocating resourcesc.eliminating relative price movements of real or financial assetsd.maintaining employment levels
Solution
The correct answer is b. A stable financial system is not capable of efficiently disallocating resources. A stable financial system is designed to efficiently allocate resources, not disallocate them. Disallocation would mean mismanagement or improper distribution of resources, which is not a characteristic of a stable financial system.
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