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AP® Macroeconomics

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Circular Flow: Financial Sector

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In the circular flow model, the financial sector does which of the following?

I. Lends savings from domestic households out to firms.
II. Lends savings from domestic firms out to other firms.
III. Lends savings from international firms to domestic firms.

A

I only.

B

II only.

C

I and II only.

D

II and III only.

E

I, II and III.