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1 FINANCE MCQS

Financial system participants reduce their demand for funds if economic growth in ____________?

  • The domestic market is stagnant
  • The domestic market is not stagnant
  • The global market is stagnant
  • The global market is not stagnant
Correct Answer: C. The global market is stagnant

Detailed Explanation

When the global market is stagnant, international trade and investments decline. This reduces borrowing needs, causing participants to demand fewer funds in the financial system.

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