Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 26, Problem 1MCQ
To determine
To find:
The option that correctly states about the financial capital.
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_________________ are a unit of measurement in which the relative value of goods and services can be expressed.
A.
Mutual Funds
B.
Curency
C.
Demand Deposits
D.
Prices
Select the true statement or statements regarding the loanable funds market.
a.The purchase of stocks and bonds is considered savings.
b.Savings from households are used by firms and governments to finance investment.
c.Savings refers to savings accounts held in banks only.
d.Foreign entities cannot save in the United States.
What is the financial market, what does it do in terms of saving investment and interest rates
Chapter 26 Solutions
Foundations of Economics (8th Edition)
Ch. 26 - Prob. 1SPPACh. 26 - Prob. 2SPPACh. 26 - Prob. 3SPPACh. 26 - Prob. 4SPPACh. 26 - Prob. 5SPPACh. 26 - Prob. 6SPPACh. 26 - Prob. 7SPPACh. 26 - Prob. 8SPPACh. 26 - Prob. 9SPPACh. 26 - Prob. 1IAPA
Ch. 26 - Prob. 2IAPACh. 26 - Prob. 3IAPACh. 26 - Prob. 4IAPACh. 26 - Prob. 5IAPACh. 26 - Prob. 6IAPACh. 26 - Prob. 7IAPACh. 26 - Prob. 8IAPACh. 26 - Prob. 9IAPACh. 26 - Prob. 10IAPACh. 26 - Prob. 1MCQCh. 26 - Prob. 2MCQCh. 26 - Prob. 3MCQCh. 26 - Prob. 4MCQCh. 26 - Prob. 5MCQCh. 26 - Prob. 6MCQCh. 26 - Prob. 7MCQCh. 26 - Prob. 8MCQ
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- Lenders of funds in financial market gets opportunity to invest in O a. Banks of the government O b. Productive assets without owning them O c. Goods of a business O d. Provision of utilities for the publicarrow_forwardA well-functioning financial system does all of these EXCEPT: a. foster economic growth by directing savings to its most productive use. b. allocate risk among market participants. c. eliminate systematic risk through diversification. d. direct resources from savers to borrowers.arrow_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
- Explain what happens in an economy when the financial markets limit access to capital. How does this affect economic growth and employment?arrow_forwardWhat is the difference between a loan and an investment? A. Investments are not made to sole proprietors. B. The investment is capped at a certain dollar amount, and a loan is not. C. Loans are only available to corporations and LLCs. D. Loans must be paid back, but investments do not.arrow_forwardQuestion 18 The main participants in the financial markets are ___. dealers, brokers, regulators. mutual funds, hedge funds, investment bankers. businesses, banks, government. borrowers, savers, financial institutions.arrow_forward
- A healthy and constantly evolving financial system is the foundation for economic efficiency and economic growth. Out of the six parts of the financial system, select two and explain why you believe they are most important elements for economic efficiency. Select two that you did not select and explain why you believe they are not the most important elements. 1. a) Money b) Financial instruments c) Financial markets d) Financial institutions e) Government regulatory agencies. f) Central banksarrow_forwardFinancial capital includes A. money, stocks, and bonds, which are capital because they provide businesses with financial resources O B. money, stocks, and bonds, which are not capital because they are not used to produce goods and services O C. banks and credit unions, which are capital because they are used to produce financial services O D. the nation's banking system, which is capital because it is the backbone of the economyarrow_forwardOne of the benefits financial capital markets offer savers is the opportunity to earn income. a. Savers earn income in the form of purchasing b. Savers earn income in the form of through partial ownership of a corporations that they acquire by by lending money to corporations when they purchasearrow_forward
- Consider that you were given a US savings bond that will pay $100 when it matures in ten years. What happens if the interest rate rises to the present value of this bond payment?Why happens if the interest rate rises to the present value of this bond payment? A. Increases in present value B. The current value is unaffected. C. A decrease in present valuearrow_forwardAn increase in interest rate would lead to a _____ it's supply of loanable funds a. No effect b. None c. Increase d. Decrease #### Correct answer //////arrow_forwardProblem 1: Identify each of the following acts as representing either saving or investment. a. Lan uses some of his income to buy government bonds. b. Minh takes some of his income and buys mutual funds. c. Linh purchases a new truck for his delivery business using borrowed funds. d. Peter uses some of his income to buy stock in a major corporation, e. Dave hires a builder to construct a new home using borrowed funds.arrow_forward
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