Which of the following is not a main core function of the financial system? a. Provide a payments system for the exchange of goods and services. b. Provide mechanisms to separate funds for smaller-scale investment c. Provide the channels to transfer funds and economic resources across industries d. Provide ways to manage uncertainty and mitigate risk
Functions of the Federal Reserve System
The Federal Reserve System looks after the financial activities and operations of the banking system. It is the apex body that has complete control over the banking regulations. All the guidelines regarding the banking system, money supply, and formulation of the monetary policy come under the purview of the Federal Reserve System. The New York Fed also helps in drafting the monetary policy and supervising the financial system.
Elastic and Inelastic Markets
Measuring the change in percentage of an economic variable with respect to change in a different economic variable is known as elasticity. This change in percentage results in a change in price concerning changes in other factors. In simple terms, when one factor brings a change to another factor, it is called elasticity.
Which of the following is not a main core function of the financial system?
a. Provide a payments system for the exchange of goods and services.
b. Provide mechanisms to separate funds for smaller-scale investment
c. Provide the channels to transfer funds and economic resources across industries
d. Provide ways to manage uncertainty and mitigate risk
According to the market segmentation theory of the term structure,
a. the interest rate for bonds of one maturity is determined by the supply and demand for bonds of that maturity.
b. bonds of one maturity are not substitutes for bonds of other maturities; therefore, interest rates on bonds of different maturities do not move together over time.
c. investors' strong preference for short-term relative to long-term bonds explains why yield
d. only A and B of the above.
Costs associated with the correspondent bank process include:
a. Interest
b. Currency conversion spread
c. Reputation costs
d. Payroll costs
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