Question

Real estate values derive from the interaction of three different sectors in the economy. Which of the following sectors serves to allocate financial resources among households and firms requiring funds?
A. User market
B. Capital market
C. Government
D. Property market

Answer 1

Answer:

B

Explanation:

The capital market serves as an intermediator between households and firms. In a classic economic model, households are owners of capital resources, but firms need these resources to operate. Then, the capital market allows that households rent their capital resources to firms and firms pay them back. It is a beneficial allocation of resources for households and for firms.