Explain How a Well-Functioning Financial System Can Increase Total Factor

Question

Examlex · Accepted Answer

The Answer is The financial system can influence the efficiency of the economy,which means it can influence total factor productivity.Financial systems match borrowers with lenders and therefore help allocate resources in an economy.By allocating funds to the individuals who are willing to pay the most to obtain the funds,which generally means their investment projects have the best likelihood for success,a good financial system ensures that resources flow to their most productive uses,which increases total factor productivity.This results in increased labour productivity and a higher standard of living.

Explain How a Well-Functioning Financial System Can Increase Total Factor

Essay

Correct Answer:
Verified

Explain How a Well-Functioning Financial System Can Increase Total Factor

Essay

Correct Answer:VerifiedShow Answer

Correct Answer:
Verified