A 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.
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A well-functioning financial system does all of these EXCEPT:
a. foster
b. allocate risk among market participants.
c. eliminate systematic risk through diversification.
d. direct resources from savers to borrowers.
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Solved in 2 steps
- 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.Mr. John Dela Cruz, wanted to start investing in the stock market, which of the following financial intermediaries can help him? *A. BanksB. Pension Fund CompaniesC. Brokerage FirmsD. Insurance CompaniesE. CooperativesExplain what happens in an economy when the financial markets limit access to capital. How does this affect economic growth and employment?
- Q2. A robust financial market is one of the pillars of stable economic growth and financial sustainability for the future.” Discuss.Define the term financial market and give examples to explain your understandingsummarize how savers, financial institutions and borrowers interact to help the economy to create capital.
- Which of the following is not a key dimension of financialization? Private equity Profits via the global sale of goods and services Public sector budget austerity Share price maximizationIt analyzes the responsibility of the financial system in the demand for investment versus the supply of savings.Choose the best answer in the brackets 1) According to the loanable funds theory, a decrease in trust to commercial banks among the population will result in a decrease of (Choose one: Loanable funds supply, inflation, velocity of money, demand of loanable funds)and will result in(Choose one: decrease, no change, increase) in market interest rates. 2) As a result of the changes described in 1), the private investments into factories and equipment will (Choose one:fall, be crowded out by the government, rise) because(Choose one: more investor would be attracted by highest interest rates, more project would be attractive, fewer intestors would be attracted by lower interest rates, less project would be considered attractive) 3) If the government simultaneously decides to increase the issue of the government bonds, according to the loanable funds theory, (Choose one: inflation, velocity of money, loanable funds supply, demand for loanable funds) will rise, leading to (Choose one:…
- Recently, the economies of North Korea and Norway have begun to grow very rapidly. This increases their citizens’ income and wealth as well. In turn, these citizens increase their savings not only in their country, but also in the United States. In this case, which of the following statements is correct? A. The supply of loanable funds decreases as savings increase. B. The supply of loanable funds increases as savings increase. C. The demand of loanable funds decreases as savings increase. D. Both supply and demand of loanable funds increase as savings increase.Recently, the economies of North Korea and Norway have begun to grow very rapidly. This increases their citizens’ income and wealth as well. In turn, these citizens increase their savings not only in their country, but also in the United States. In this case, which of the following statements is correct? A. The supply of loanable funds decreases as savings increase. B. The supply of loanable funds increases as savings increase. C. The demand of loanable funds decreases as savings increase. D. Both supply and demand of loanable funds increase as savings increase. Clear my choiceDiffering role of financial market in economy