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Businesses, individuals, and governments often need to raise capital, while others have surplus funds. In a well-functioning economy, capital flows efficiently from those with surplus capital to those who need it. Transfers can take place in 3 ways: direct transfers without going through any type of financial institution, indirect transfers through investment banks that underwrite the securities, and indirect transfers through financial.

a. True
b. False

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Answer:

The correct answer is the option A: True.

Explanation:

To begin with, according to the microeconomics theory regarding the basic model of the economy of a country in where the three major characters are the government, the companies and the families, the way that the surplus capital will go from one to the other is determine by the state of the economy itself, meaning that with everything being in perfect state, the the ones who need the capital will obtain it from the other through the use of intermediaries like the bank or also through a direct transsaction accorded with the owner of the capital as well as and indirect transfer using the financial sector.

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