Which of the following is not correct?Question 3 options: By saving a larger portion of its GDP, a country can raise its output per worker. Savers supply their money to the financial system with the expectation that they will get it back with a return at a later date. Financial intermediaries are the only type of financial institution. The financial system helps match people’s saving with other people’s borrowing.

option c is is not correct financial intrementis not are only type of financial institutions…

Answered: Which of the following is not correct?…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter19: Money Creation

Section: Chapter Questions

Problem 1SQ

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One of the biggest problems for any economy is to figure out how to get or transfer money from people or firms who want to save (savers) to people or firms who want to borrow (investors). Explain how financial markets can help to solve this problem efficiently. Discuss how financial markets function and which tools they can offer to solve this problem. Discuss how financial systems are of crucial significance to adequate capital formation, which is indispensable to a speedy economic growth and development.
One of the tasks of a Financial System include providing affordable loans to all consumers and firms.True or False
The main functions of the financial system include: Provide a means of making payments. Prepare to sacrifice some income to avoid uncertainty. Assist borrowing and lending. All of the above
It analyzes the responsibility of the financial system in the demand for investment versus the supply of savings.
Many countries have policies that limit how much interest a moneylender can charge on a loan. Do you think these limits are a good idea? Who benefits from the laws and who loses? What are likely to be the long-term effects of such laws? Tips: For part 2, you may think about how a low interest rate would affect the poor and those who owe huge debts. For part 3, you may think about how it would affect the profitability of the banking sector and the supply of lending (will lenders be encouraged to lend more?), and what implications it may have for "credit rationing" (being credit constrained).
Which of the following is TRUE about interest rates offered by financial Intermediaries? *A.The interest rates issued by financial intermediaries are standard across different financial institutions.B. Interest rates paid by DSUs are lower and SSUs are paid with higher interest rates.C. Interest rates issued by financial intermediaries are based solely on the issuance of central banks.D. Interest rates paid to SSUs are lower compared to the interest they collect to DSUs.
Monetary and fiscal policies directly affect the level of activities in the financial market. Is it true or false?
Basel II Which of the following was done under Basel II guidelines? Revisions were made to the type of analysis banks should do based on the potential of negative economic scenarios. Revisions were made to what assets banks could invest in. Revisions were made recommending that banks maintain a capital conservation buffer of at least 2.5 percent of their risk-weighted assets. Basel III Revisions were made to the way credit risk was measured. Which of the following was done under Basel III guidelines? Revisions were made to what assets banks could invest in. Banks' capital ratio requirements began to factor into operational risk. Revisions were made recommending that banks maintain retained earnings and common stock of at least 6 percent of their total risk- weighted assets. Revisions were made to the way banks could acquire risky assets.
Topic: Banks and the Economy For an economy to thrive, there must be a strong banking system. If the banks fail and must be bailed out, it will have an effect on the economy. If people lose faith in the safety and security of financial institutions, what will happen to the U.S. economy? Please use at least 100 words in your response.
Which of the following is NOT typically a role for a financial intermediary...? make public financial statements of borrowers evaluate the riskiness of lending to borrowers pool funds from lenders monitor the financial conditions of borrowers
The economy of a hypothetical country has been stable for two or three years with very low unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples’ investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their new-found wealth to buy things that they had been hesitant to purchase in the past. Include detailed answers to the following questions: 1. What would be the likely impact on the government budget and national debt of the use of these fiscal policy tools (taxes, government expenditure, transfer payments, and interest rates)? 2. How would the use of these fiscal policy tools stabilize the economy?
The government is seeking to directly borrow money from the central bank in order to invest in a large infrastructure project that could help improve the livelihood of its citizens. Should the central bank agree to lend to the government? why or why not?

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	By saving a larger portion of its GDP, a country can raise its output per worker.
	Savers supply their money to the financial system with the expectation that they will get it back with a return at a later date.
	Financial intermediaries are the only type of financial institution.
	The financial system helps match people’s saving with other people’s borrowing.