EBK ESSENTIALS OF ECONOMICS
8th Edition
ISBN: 8220103599832
Author: Mankiw
Publisher: Cengage Learning US
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Question
Chapter 18, Problem 1QR
To determine
The role of a financial system and the different financial markets and intermediaries.
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Please discuss the following.
1. Financial markets are institutions and systems that facilitate transactions in all
types of financial claims.
2. What is the importance of financial markets in a nation's economy? Discuss
fully.
Is an economy both social and a financial system?
What are the different Financial Intermediaries and explain how they carry out the objectives of the financial system?
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- Which of the following explains the relevance of financial institutions? a. Financial institutions spur economic activity by providing credit for business expansion. b. Financial institutions create profits for depositors. c. Financial institutions allow governments to print money. d. Financial institutions provide the main source of funding for start-ups.arrow_forwardWhich of the following is not a primary participant in the financial marketplace? a. governments b. businesses c. military units d. individual householdsarrow_forwardWhich of the following is NOT TRUE about Financial Intermediaries? *A. Financial Intermediaries are institutions that serves as a bridge between the SSUs and DSUs.B. Financial Intermediaries makes the financial system more efficient.C. Financial Intermediaries earn profits through various transactions and services they offer.D. Financial Intermediaries offers investment advices.arrow_forward
- Which of the following is TRUE about financial regulations? *A. Financial regulations makes the financial system organized, stable and maintain its integrity.B. Financial regulations are not always required in the financial system because financial institutions are already regulated by designated government agencies.C. Financial who are privately trading inside information are highly acceptable in the financial system.D. Financial regulations are laws that are not necessarily need to be enforced.E. None of the choices.arrow_forwardOne of the tasks of a Financial System include providing affordable loans to all consumers and firms.True or Falsearrow_forwardOne 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.arrow_forward
- The following are the common characteristics of financial intermediaries, except: *a. Providers of loans.b. Maintains stability in the capital market.c. Making the investors rich.d. Providing investment advicearrow_forwardMatch each of the following players in the financial system with the financial product(s) they are most associated with. Instructions: You may select more than one answer. Click the box with a check mark for correct answers, and click to empty the box for the wrong answers. Players Financial product Stocks a. Commercial banks 2 Bonds ? Loans Stocks b. Savers Bonds 2 Loans Stocks c. Investment banks Bonds 2 Loansarrow_forwardview picturearrow_forward
- It analyzes the responsibility of the financial system in the demand for investment versus the supply of savings.arrow_forwardWhy does the "wherewithal" and "efficiency" of the financial system matter (so much)?arrow_forwardExplain why the existence of financial institutions can allocate financial resources better!arrow_forward
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