. The ultimate role of the financial system of a country is to: A) Protect investors. B) Facilitate production, employment, and consumption. C) Be a low-cost source of funds for government. D) Provide business opportunities. 2. Purchasing financial instruments in today's economy versus purchasing financial instruments 30 years ago: A) is an activity still practiced mostly by the wealthy. B) involves more significant transactions costs. C) requires a relatively large sum of money (more than $100,000). D) is easier and cheaper due to the use of innovations such as mutual funds. 3. The organization responsible for paying the monetary obligations incurred by the U.S. Government is/are: A) The Federal Reserve System. B) The U.S. Treasury. C) The Federal Reserve and the U.S. Treasury. D) Congress. E) The FDIC. In the United States, the economic agent receiving the largest surplus transfer from financial markets is normally A) households B) business firms C) the U.S. Federal Government. D) commercial banks. 5. The presence of transaction costs in financial markets explains, in part, why A) financial intermediaries play such an important role in the direct finance financial markets. B) equity and bond financing are the most important methods utilized by businesses to acquire funds. ") businesses get more funds through financial intermediaries than equity markets. D) direct financing is more important than indirect financing as a source of funds. . Using the figure above for reference, which point would most likely have the lowest money growth rate? A) point F B) point I () point K D) All the points since money growth is constant. Use the following hypothetical data in the table below to answer Questions 7 & 8. Time period 2025 2026 2027 2028 2029 Price index 200 240 284 292 296 . During the time from period 2025 through period 2027, A) the annual rate of inflation rises. B) the annual rate of inflation falls. ") prices are relatively stable when compared to the other periods. D) deflation is rapid