Which of the following statements is true of the global financial system?
A)It consists of the institutional frameworks, rules, and procedures that govern how national currencies are exchanged for one another.
B)It includes key players such as finance ministries and national stock exchanges but excludes commercial banks and central banks.
C)It is built on the activities of firms, banks, and financial institutions engaged in ongoing international financial activity.
D)Since the 1960s, the volume and structure of the global financial system has been reducing.

Question

Quizplus · Accepted Answer

The global financial system is built on the activities of firms, banks, and financial institutions engaged in ongoing international financial activity. This includes commercial banks and central banks, as well as finance ministries and national stock exchanges. Option A is incorrect because it only refers to currency exchange, whereas the global financial system encompasses more than just exchange rates. Option D is also incorrect as the global financial system has been expanding since the 1960s, not decreasing.

Which of the Following Statements Is True of the Global