1. A farmer borrows fund from a government financing institution. In turn, he uses the fund for production purposes. Do you consider this activity as business finance? Explain.

Q: True or False 1. Another advantage of having a personal financial plan is effective debt management.…

A: The time period mortgage refers to a sort of credit score automobile wherein a amount of money is…

Q: How does using the accounting support fee to fund the FASB create more independence than using…

A: Answer:- FASB:- To establish and advance Generally Accepted Accounting Principles in the U.S. in the…

Q: a. The purchase of mutual fund shares. b. Depositing in a credit union. c. Borrowing from a friend…

A: Financial intermediaries buy from the borrowers direct claims with one set of features (e.g.…

Q: Which of the following determine(s) the level of real interest rates? 1) The supply of savings by…

A: INTEREST RATE can be determined by the market forces of supply and demand.Investments and savings…

Q: Explain the terms ‘invoice discounting’ and ‘factoring’ and the advantages of these services to the…

A: answer are as follows

Q: be the process by which the financial markets would operate to transfer the funds from savers to the…

A: Step 1 A financial market is a medium in economics that allows people to buy, sell, create, and…

Q: Give an example of a green financial product. Explain this product and compare it with the standard…

A: Green financial products will be helpful for decreasing the carbon from our environment and make it…

Q: What are the two main types that a company uses as a source of funding? Explain in detail

A: T etwo main type of source of  funding is : debt equity

Q: A owner is considering factoring to finace its business, explain what isit and what are the…

A: The company is using factoring to finance its business. Factoring involves a financial arrangement…

Q: The process of raising thi

A: There are many methods to raise funds directly, including issuing shares and debentures.

Q: Which of the following can be described as involving indirect finance? a. People pay premiums to an…

A: An indirect finance is referred as the finance, where the borrowers used to borrow the funds from…

Q: A taxpayer with economic activity connected to virtual currency must do which of the following?…

A: Virtual currency does not have a physical existence like normal currencies issued by a government.…

Q: How to increase ROA and ROE in a rural bank? Explain thoroughly

A: Ratio analysis: Ratio analysis is a tool that establishes a relationship between the different…

Q: What is the meaning of “financing” in the financial market a. Advising an organization to raise…

A: Financing plays a key role for firms in the financial market. It is explained in the next step.

Q: In the context of your organization, evaluate options for the financing of business activities.  You…

A: The options for financing business activities as follows: Bank loans: Mostly banks have numerous…

Q: whether the statement is true or false.

A: Asset-based financing is the finance availed by a company in lieu of its assets. In such cases, the…

Q: If households and businesses lend their surplus cash directly to borrowers, there would be no need…

A: Solution:   Financial institution facilitates the flow of funds between the individuals and or the…

Q: Financial markets have the basic function of: O a. Assuring that governments need deficit money. O…

A: Financial markets is a marketplace for trading. It is a place where financial instruments are…

Q: This type of finance is concerned with the revenue and disbursement of government agencies. a.…

A: Finance, money or funds is very important for a business organisation. Funds will be used for…

Q: What can be said of microfinance? O a. It is concerned with the study as to how he allocates the…

A: micro finance: it is the finance facility to low income group or unemployed group which does not…

Q: Describe the role of the public finance in:   the economy explain the allocation of resources and…

A: Solution- (1)    Immature countries are hooked in to fast economic development which needs colossal…

Q: How sources of finance allow business to build?explain

A: Finance is required in conducting every business, no business conducts its business activity…

Q: The major category within the Financial Accounting Equation (FAE) which tracks the owner's rights or…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Given a financial institution that make money in three ways: interest income, interest income, and…

A: Banks and Financial institutions make most of their money from loaning and re-loaning money. Low…

Q: Why entrepreneurs need the support of the government ?

A: For encouraging the budding entrepreneurs for the kickstart innovative businesses that would…

Q: As a banker, which sources of interest free financing is best for business to raise funds? Elaborate…

A: Certain sections of the business community are not able to avail interest based credit due to…

Q: Kindly help on these questions. 1. What are some recommendations methods for raising sufficient…

A: Note : As per our guidelines, we can only answer 1 question at once. Please post other questions…

Q: 1. Mr. Salim, a Finance Manager, is concentrating on how the finance for his company can be…

A: Cash mobilization represents a technique used in order to assemble the fund and the funds would be…

Q: Companies borrow because it is in their best interests financially.

A: The given statement is True..... Companies borrow because it is in their best interests…

Q: What is failure of competition?

A: The question is based on the concept of economic failure of market due to imperfect situation

Q: What happens if a business use the owner's personal fund to pay for expenses?

A: It does happens sometimes that the owner pays for the expenses from his personal fund under certain…

Q: Using loanable funds model, explain how tax cuts for businesses will impact the interest rate and…

A: If the government has announced tax cut for the business sector and it would be leading to increase…

Q: Which of the following is NOT considered a finance activity?     Planning and budgeting…

A: There are various financial activities.

Q: What is Circulating Working Capital?  To     what extent are current liabilities a     source of…

A: Circulating Working Capital-             Circulating capital is cash being employed for core…

Q: It is talking about Hong Kong Tax, Special Business, Profit Tax Computation of Financial…

A: The question is asking for an explanation of DIPN 21, a tax guideline in Hong Kong, and its related…

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.