a) Consider an economy where private businesses/household did not have access to funds. b) Consider an...

a) Consider an economy where private businesses/household did not have access to funds.

b) Consider an economy where private businesses/household did not have avenue to invest their surplus funds

c) What will happen to the economic activity and the economy?

Expert Solution

A fund is defined as a pool of money that has been saved or has been set aside for a specific purpose .

a) an economy where the private businesses/husehold did not have access to funds that economy will fall into a dormat state and will be rendered underdevloped and will not grow effectively and will not be able to contribute in the country's GDP . such an economy will be a burden on the total economy of the country and if such a private business tends to be a domestic traditional industry than it will face a shortfall and such a business will be able to flourish eventually and indirectly that may effect exports of the country and the foreign income might see a shortfall

b) an economy where private business/househol did not have avenue to invest their surplus funds in this case can be of an underdevloped nation where there is a lack of infrastructure facilities and adequate governmental policies ans measures for implementation and application of funds . in such a situation the economy will be in a same dormant stage as in the case (a) and will not get upliftment and the surplus fund that could have gained interest and generated profits for the business will not be able to flourish and be generated .

in my opinion where in case a whwre the economy does not have funds but it might be having avenue for implementation of funds but in case b where the economy has funds but does not have avenue they can pool funds and avenue togther so that both of the economy can flourish and contribute to each others economy .

Rahul Sunny answered 8 months ago

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