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.

Q: In detail what are some of the factors that affect demand for loanable funds according to the…

A: Demand is the total quantity of goods and services in the market for which the consumer is willing…

Q: Mr. John Dela Cruz, wanted to start investing in the stock market, which of the following financial…

A: In a market, there are different industries and different types of markets for different types of…

Q: People should buy bonds when they think that interest rates are as high as they will go.

A: A bond is a financial instrument that allows an issuer to raise capital by borrowing money from…

Q: Which of the following was an underlying cause of the economic crisis of 2008? a. The imposition of…

A: Conventional lending standards had started to erode since the 1990s.

Q: Let's say that you have put $1,000 in your savings account at a local financial institution, and an…

A: 1.The employee is correct, of course.The reason for this is that the money you have deposited in…

Q: How does the financial system coordinate saving and investment?

A: By using the loanable fund as a tool, the financial system coordinates saving and investment in the…

Q: list the factors that affect the demand side of the loanable funds market. which factors shift the…

A: The demand for loanable funds is based on borrowings. There are several factors that can affect the…

Q: Short term savings and loans are part of what

A: Financial Market generally in an economy is characterized as – Money Market and Capital Market…

Q: You are the manager of a local bank. Due to unstable financial conditions, savers are worried that…

A: Hey, Thank you for the question. According to our policy, we can only answer 1 question per session.…

Q: In October 1987 stock prices fell 22 percent in one day and bonds rate fell also. Use the loanable…

A: In October 1987, stock prices fell by 22 percent in one day created a fear in the mind of the…

Q: Is the stock market "out of control?" How can the poor benefit from this financial institution?

A: A company or institution which is involved in the financial activities of the economy like,…

Q: Of the following, which can create an incentive for financial innovation? a. technological change…

A: Financial innovation and technological change can be aided by deregulation.   Deregulation is the…

Q: Why is it important for people who own stocks and bonds to diversify their holdings? What type of…

A: System that permits exchange of funds between the borrowers, investors and lenders via the medium of…

Q: Why does the "wherewithal" and "efficiency" of the financial system matter (so much)?

A: Financial markets are the market system deals with borrowers, lenders, and investors negotiating for…

Q: At the Great Recession of 2008, why would Wall Street buy mortgages of people who had really bad…

A: Wall Street buy mortgages of those people who really have a bad credit rating and no down payment…

Q: A healthy and constantly evolving financial system is the foundation for economic efficiency and…

A: Financial markets : Financial markets (such as those that trade stocks or bonds), instruments (from…

Q: Why is it so important to an economy to have fully developed financial markets?

A: Financial markets are those markets in which creation and trading of financial assets take place .…

Q: purpose and contents of "Financial Markets" is : Group of answer choices   about what a basic…

A: A financial market refers to the form of market in which people trade financial assets and…

Q: A well-functioning financial system does all of these EXCEPT: a. foster economic growth by…

A: The objective of the financial system is to manage the availability of funds in the market. This not…

Q: Imagine that you wish to launch a start-up online business. You do not have enough capital…

A: Islamic banks are based on Islamic laws which imply principles of Islamic finance and banking have…

Q: write in 3 paragraphs what financial institutions are

A: Financial institutions provides variety of services ranging from deposits, lending and investments…

Q: Many countries have policies that limit how much interest a moneylender can charge on a loan. Do…

A: Interest rate is considered as the borrowing cost because the person who is borrowing money has to…

Q: In the loanable funds market, if firms become more optimistic about future profitability, then the…

A: Loanable funds refers to the amount which is used in the activity of borrowing and lending it to the…

Q: Choose the best answer in the brackets  1) According to the loanable funds theory, a decrease in…

A: In the classical model, the loanable funds market determines the equilibrium interest rate and the…

Q: Provide two examples of changes in the market for loanable funds that can result in a change in the…

A: Since the questions asked multiple questions. According to our policy, we can only answer 1 question…

Q: List the main function of investment banks in the financial system?

A: Investment banks are the banks that help startup companies to launch. It acts as an intermediary…

Q: e Chrome…

A: The market for Loanable Funds defines how the borrowing and lending activities take place in the…

Q: Discuss the role of banks as financial institutions that fuel the economic growth of a nation.

A: To shape the economic world and the functioning of it, the banking system of a country plays a major…

Q: What role do commercial banks play in the development of an economy

A: The commercial banks play a vital role in any economy. Developed commercial bank systems ensure and…

Q: Which of these is NOT a financial intermediary in the market for loanable funds? credit unions O an…

A: Answer to the questions are as follows :

Q: What is the significance of financial markets in the country’s economy?

A: Financial market: - it is a market for financial securities where people buy and sell financial…

Q: What is importance of financial markets for the productive capacity of the economy?

A: The economies work with the motive of increasing, or enhancing their overall economic growth, and…

Q: Why emerging market economies is important in financial markets?

A: A financial market is considered as the market in which different people trade in financial…

Q: summarize how savers, financial institutions and borrowers interact to help the economy to create…

A: Most of the amount of capital within the economy is generated by banks in the form of bank deposits.…

Q: Explain factors that affect credit creation in an economy

A: As the main source of currency circulation in an economy, a central bank is the primary money supply…

Q: For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain!…

A: Bonds are defined as the fixed income securities issued by the private companies and government…

Q: Which of the following situations represent investment or saving? Explain.  Your family takes out a…

A: Note- Since you've asked multiple question, we'll only solve the first question for you. If you want…

Q: Explain how financial market mobilizes money and wealth creation opportunity within a country.

A: Financial market mobilizes money through a well developed process and bringing over the smooth…

Q: seven major financial institutions

A: Financial institutions today help the economy to lend, distribute and borrow money for various…

Q: Define the term financial market and give examples to explain your understanding

A: Countries financial system facilitates the movements of funds from savers to borrowers .   And…

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.