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Choose the correct answer and give short explaination.
5. Generally speaking, liberalization of financial markets when combined with a weak, underdeveloped domestic financial system tends to
A. Strengthen the domestic financial system in the short run
B. Create an environment susceptible to currency and financial crises
C. Raise interest rates and lead to domestic recession
D. None of the above
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- Following are some ways by which some of the challenges in the financial system in Ghana may be Promote confidence in the economy I)How can this be done?Read the following premise carefully and answer the questions specifically and in detail: "Financial institutions such as banks, mortgage companies and finance companies serve as intermediaries between those who have a surplus versus those who have a deficit creating a capital injection market." Explain in detail the function of the financial market and its influence on capital injection. Analyze the responsibility of the financial system in the demand for investment versus the supply of savings.Discuss the stability/instability of the financial system. Include: c) Historic frequency of financial crises/recessions. d) Your opinion on how to best management the financial system. Give correct typed explanation.thank you.
- 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.The Minsky Model of a Financial Crisis . Economist Hyman Minsky believed “…the financial system in a market economy is unstable, fragile, and prone to crisis.” Explain in some detail how the financial system is “unstable, fragile and prone to crisis,” according to Minsky What did the psychological term euphoria mean to Hyman Minsky? In other words, define the term as Minsky would define it Briefly specify (but do not explain) the primary case against the market system of economic organizationThe financial system in Jamaica has been the subject of much attention since the news broke of the alleged fraud at Stocks and Securities Limited (SSL). The governor of the Bank of Jamaica (BOJ) has been fielding calls from concerned investors, international financial institutions, and even other regional regulators concerning the impact of this situation and the negative media reporting would have on the stability of the financial system in Jamaica and the Caribbean region.The governor would like to preserve confidence in the financial markets and institutions and has decided to embark on a series of educational “road-shows” where he will address targeted stakeholders such as the American Chamber of Commerce (AMCHAM), investor groups and the media.In this regard, the governor has assigned your team of senior professionals employed at the Bank of Jamaica to prepare a presentation slide deck for his address. Give an overview of the structure of the Jamaica financial systemThe role of…
- H6. How can the loan decisions of individuals and private bankers contribute to the instability in the macroeconomy (the business cycle)? Otherwise stated, how can an uncontrolled banking system destabilize the economy? Does monetary or fiscal policy have a longer time lag? Why?9 - If the interest rates do not change as a result of the central bank emission, what is the state of the country called?A) RecessionB) Liquidity preferenceC) liquidity trapD) contractionary economic policyE) saving paradox24)To reassure investors who were unwilling to buy mortgages in the secondary market, the U.S. Congress used two government-sponsored enterprises (GSEs) called, ________. The GSEs role was to sell bonds to investors and use the funds to purchase mortgages from _______. Select one: a. the Fed and the Treasury Department; Households b. the Fed and Treasury Department; Banks c. Fannie Mae and Freddie Mac; Households d. Fannie Mae and Freddie Mac; Banks e. Fannie Mae and Freddie Mac; Investment Banks
- 4. List and discuss the various reasons that contributed to the financial crisis that occurred in 2008.a)What is meant by market failure? b)Why does increased volatility in financial markets with respect to the price of financial assets,interest rates,and exchange rates foster financial innovation? c)Why is the holding of a claim on a financial intermediary by an investor considered an indirect investment in another entity? d)Explain how a financial intermediary reduces the cost of contracting and information processing.11) One possible reason for slower growth in developing and transition countries is A) capital may not be directed to its most productive use. B) strict accounting standards are too stringent for the banks to meet. C) the weak link between government and financial intermediaries. D) the lack of adverse selection and moral hazard problems. 12) One reason financial systems in developing and transition countries are underdeveloped is A) they have weak links to their governments. B) they make loans only to nonprofit entities. C) the legal system may be poor making it difficult to enforce restrictive covenants. D) the accounting standards are too stringent for the banks to meet. 13) Because of the weak systems of property rights in many developing and transition economies, the financial system is unable to use collateral effectively worsening the ________ problem. A) adverse selection B) moral hazard C) principal/agent D) diversification 14) In developing…