Homework Answers
ANs) A) True
Usually money circulates between these three. The savers usually save their money in financial institutions like banks. Then these financial institutions acts as lenders and gives out loans to people or corporations who borrows money
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21. The cycle of money explains the relationship between savers, borrowers and financial institutions (lenders) a....
Financial intermediation is the process of: settling disputes between borrowers and lenders. advising corporations how to...
Financial intermediation is the process of: settling disputes between borrowers and lenders. advising corporations how to invest. transferring funds from savers to borrowers. converting from a barter economy to a money economy.
Discuss why financial institutions cannot be fully replaced by financial markets or face-to-face interactions between borrowers...
Discuss why financial institutions cannot be fully replaced by financial markets or face-to-face interactions between borrowers and savers. Where appropriate, indicate how the phenomenon of asymmetric information creates conflicting interests among the involved parties and what the potential solutions could be.
Loans made between borrowers and lenders are 1 Multiple Choice 84 nts liabilities to the lenders...
Loans made between borrowers and lenders are 1 Multiple Choice 84 nts liabilities to the lenders and assets to the borrowers since the borrower obtains the funds. assets to the lenders and liabilities of the borrowers since the promises are made to the lenders. not part of either parties' assets or liabilities until the loans are repaid liabilities to both the lenders and the borrowers. Financial intermediaries 2 Multiple Choice 2.94 points O can be banks, but not all financial...
Banks and credit unions are considered financial intermediaries because they act as financial institutions through which...
Banks and credit unions are considered financial intermediaries because they act as financial institutions through which savers can indirectly provide funds to borrowers. Select one: True False The implementation of an investment tax credit would cause the demand for loanable funds to shift to the left and interest rates and the quantity of saving would fall. Select one: True False If a government went from a budget deficit to a surplus, the supply of loanable funds would shift right, interest...
Productivity relates to the quantity of goods and services produced from each unit of money input....
Productivity relates to the quantity of goods and services produced from each unit of money input. True False The stock of equipment and structures that are used to produce goods and services is called physical capital. True False If we keep adding inputs and the benefits from it decline, we are experiencing diminishing returns. True False The way for savers to indirectly provide funds to borrowers is through a financial intermediary. True False Savers and borrowers come together in the...
If there were no financial institutions then the users of funds, such as corporations in the...
If there were no financial institutions then the users of funds, such as corporations in the economy, would have to approach the savers of funds, such as households, directly in order to fund their investment projects and fill their borrowing needs. True or False
Which of the following explains why the demand for money curve has an inverse relationship between...
Which of the following explains why the demand for money curve has an inverse relationship between the interest rates and the quantity of money demanded? a. As the interest rate falls, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments. b. As the interest rate rises, the demand for money curve shifts outward to the right. c. As the interest rate rises, people find it advantageous to borrow...
which of the following did not contribute to the 2008 financial crisis a. borrowers b. mortgage lenders c. rating agenci...
which of the following did not contribute to the 2008 financial crisis a. borrowers b. mortgage lenders c. rating agencies d. the fed e. financial regulators f. the NASDAQ index
18. FINANCIAL INSTITUTIONS End of Chapter Quiz Answer True (T) or False (F): 1. Financial institutions...
18. FINANCIAL INSTITUTIONS End of Chapter Quiz Answer True (T) or False (F): 1. Financial institutions are businesses that store money for customers and lend money to customers. 2. In order to earn the most profit. most financial institutions loan out all the money that their customers deposit. and processing checks is called interest. ness and pay their owners a profit. 3. The fees financial institutions charge customers for storing money 4. Financial institutions use the money they earn to...
Consider the following: I. There is a negative relationship between interest rates and the money supply. II. There...
Consider the following: I. There is a negative relationship between interest rates and the money supply. II. There is a positive relationship between interest rates and the money supply. a. I is always true; II is always false. b. II is always true and I is always false. c. I is true in the short run and II is true in the long run. d. Both I and II are always false.
Financial intermediation is the process of: settling disputes between borrowers and lenders. advising corporations how to invest. transferring funds from savers to borrowers. converting from a barter economy to a money economy.
Loans made between borrowers and lenders are 1 Multiple Choice 84 nts liabilities to the lenders and assets to the borrowers since the borrower obtains the funds. assets to the lenders and liabilities of the borrowers since the promises are made to the lenders. not part of either parties' assets or liabilities until the loans are repaid liabilities to both the lenders and the borrowers. Financial intermediaries 2 Multiple Choice 2.94 points O can be banks, but not all financial...
Productivity relates to the quantity of goods and services produced from each unit of money input. True False The stock of equipment and structures that are used to produce goods and services is called physical capital. True False If we keep adding inputs and the benefits from it decline, we are experiencing diminishing returns. True False The way for savers to indirectly provide funds to borrowers is through a financial intermediary. True False Savers and borrowers come together in the...
18. FINANCIAL INSTITUTIONS End of Chapter Quiz Answer True (T) or False (F): 1. Financial institutions are businesses that store money for customers and lend money to customers. 2. In order to earn the most profit. most financial institutions loan out all the money that their customers deposit. and processing checks is called interest. ness and pay their owners a profit. 3. The fees financial institutions charge customers for storing money 4. Financial institutions use the money they earn to...
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