ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Bringing together people with funds to lend and people who want to borrow funds.
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Assuring that the swings in the business cycle are less pronounced
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Assuring that governments need never resort to printing money
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Both a & b
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Both b & c
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Detailed explanation-1: -The correct answer is (A) bringing together people with funds to lend and people who want to borrow funds. The financial market has a primary function of bringing savers and borrowers together. This means that the fund that is saved in savings accounts is issued out as loans to spenders or borrowers.
Detailed explanation-2: -Although banks do many things, their primary role is to take in funds-called deposits-from those with money, pool them, and lend them to those who need funds. Banks are intermediaries between depositors (who lend money to the bank) and borrowers (to whom the bank lends money).
Detailed explanation-3: -Money markets deal in short term lending, borrowing, buying and selling.
Detailed explanation-4: -Function #1: Facilitating Payments. Function #2: Transfer of Resources. Function #3: Risk Management. Function #4: Managing Information. Function #5: Efficient Middleman. Function #6: Pooling of Resources.
Detailed explanation-5: -Asset storage. Commercial banks provide safe storage for both cash (notes and coins), as well as precious metals such as gold and silver. Providing loans. Investments. Spreading risk. Economies of scale. Economies of scope. Bank. Credit union. More items •07-Dec-2022