ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 13, Problem 2.7P
To determine
A depository institution and its types. Role of depository institution, as intermediaries between savers and borrowers.
Concept Introduction:
Depository institutions are bank, building society, credit union, or other financial institution that solicits and accepts savings of the general public as demand deposits or time deposits, and pays a fixed or variable rate of interest.
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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.
Karrie is a golf pro, and after she paid taxes, her income from golf and her interest from financial assets totalled $2,500,000 in 2019. At the beginning of 2019, she owned $1,100,000 worth of financial assets. At the end of 2019, Karrie's financial assets were worth $1,300,000. How much did Karrie save during 2019?
Discuss five ways which the country can do to increase its savings rate.
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- Let's say that you have put $1,000 in your savings account at a local financial institution, and an employee of the bank tells you that the bank does not have the money you deposited in its vault (or anywhere else) in the bank. Could the employee be correct and, if so, then where is the money that you deposited into your savings account? Should you be worried about getting your deposit back from the bank? Why or why not? Explain how your deposit benefits the banking and financial system in the U.S.arrow_forwardExplain what happens in an economy when the financial markets limit access to capital. How does this affect economic growth and employment?arrow_forwardon a supply and demand diagram for funds, show what happens to interest rates and explain what happens to savings and investment when household decreases their consumptionarrow_forward
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