functions of financial institutions, how do you explain the impact of these functions on: 1. İnvestor's decisions 2. The economy 3. Financial markets Question 3 How the following events affect interest rates? Be clear in your answer. 1. An earthquake destroys bridges and roads in Turkey, leading to increased investment spending for rebuilding the infrastructure. 2. Future taxes of businesses are expected to be increased. 3. Corona pandemic is forcing people to stay home to protect themselves and spend less money than usual. 4. The government proposes a new tax on savings.

functions of financial institutions, how do you explain the impact of these functions on: 1. İnvestor's decisions 2. The economy 3. Financial markets Question 3 How the following events affect interest rates? Be clear in your answer. 1. An earthquake destroys bridges and roads in Turkey, leading to increased investment spending for rebuilding the infrastructure. 2. Future taxes of businesses are expected to be increased. 3. Corona pandemic is forcing people to stay home to protect themselves and spend less money than usual. 4. The government proposes a new tax on savings.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Savings,investment And The Financial System

Section: Chapter Questions

Problem 1QR

See similar textbooks

Similar questions

1.show the relationship between financial markets, instruments and financial institutions using a diagrammed or a model to reflect your understanding. Be sure to explain your model and the relationship between the parts Identify the players in the financial markets and given examples of these
1. Various financial instruments usually serve one of two distinct purposes: to store value or to transfer risk. Name a financial instrument used for each purpose. 2. Explain with example, what is stock and bond. Why the stock and bond markets are important in an economy.
1. One of the consideration in making investments which allows the investor to increase the value of its assets to offset increase in the level of prices. a. TAX SHELTERb. LIQUIDITYc. INFLATION HEDGEd. PROTECTION OF CAPITAL 2. It facilitate the flow of funds from the suppliers to the demanders in the financial market. *a. GOVERNMENTb. FINANCIAL INSTITUTIONc. NET DEMANDERS OF FUNDSd. NET SUPPLIER OF FUNDS
Paysl Question 20 Which one of the following is an incorrect statement about US financial system? O Saving and investment are important determinants of long run growth in GDP and living standards. O The primary advantage of mutual funds is that they allow people with small amounts of money to diversity their holdings O Financial Intermediaries are financial institutions through which savers can directly provide funds to borrowers O The institutions that make up this system-the bond market, the stock market, banks, and mutual funds-- have the role of coordinating the economy's saving and investment. Question 21 Which one of the folawing is an incorrect statement about the history of The US Central Bank? O In 1836. President Andrew Jackson closed the Second Bank of the United States (SBUS) because of his deep distrust of financial elites. It led to a period of rapid monetary expansion and inflation, which was soon folowed by financial panics in 1837 and 1839 and a severe recession O The…
What is a financial bubble in the context of asset markets? A. A situation where asset prices are stable and reflect intrinsic value B. A sudden and unsustainable increase in asset prices followed by a crash C. A government policy to regulate asset markets D. A situation where asset prices are controlled by a single entity
Discuss the importance of Financial System. How do Financial Markets help the economy and how can it hurt the economy? Site an example. What are the different Financial Intermediaries and explain how they carry out the objectives of the financial system? Differentiate Direct Financing and Indirect Financing as illustrated in the figure 1 above. What are Financial Instruments? Give examples and explain each.
5. Define financial system and then discuss the difference between financial markets and financial intermediaries. Medium answer
The stock markets are the most watched and reported of the financial markets because: 1. They are predictors, bellwethers of economic activity II. They are the most widely held financial securities III. Many individual investors own them in their retirement accounts O. I O II. I & I O II.I, II & II O IV. I & II
Please explain the timing intermediation of the financial institutions in financial markets.And,also discuss the potential risk financial institutions are exposed to in the providing this role.
5. Which of the following statements about financial crises is correct? a. They have involved loss of confidence and runs on financial institutions. b. They have been a recurrent feature of the U.S. economy since at least 1873. c. Such crises had a major role in the causation of both the Great Depression or the Great Recession. d. all of the above
7. Why the price elasticities of demand and supply are very important? If there is a property investor which of the two markets should they choose and why? Which market is more risky? 8. A simple stock flow model - quick adjustment of rents discuss how the stock model operates if an exogenous factor affects the market.
Please answer the both questions I will give you Upvote 1) Why is a financial crisis likely to lead to a contraction in economic activity? a. None of the above are correct. b. Those that borrow funds to finance productive investment opportunities will have a greater opportunity to obtain financing. c. A disruption in the financial system diminishes the flow of funds from savers to borrowers. d. Disruptions in the financial system decreases asymmetric information, thereby decreasing the associated problems of adverse selection and moral hazard. 2) Suppose the Federal Reserve is selling $10 million of bonds to First National Bank. What is the impact on reserves and the monetary base? a. Reserves fall by $4 million and the Monetary Base falls by $4 million. b. Reserves rise by $2 million and the Monetary Base rises by $2 million. c. Reserves fall by $2 million and the Monetary Base rises by $2 million. d. Reserves fall by $2 million and the Monetary Base falls by $2 million.