What is microfinance, and how can it contribute to economic growth?
What will be an ideal response?
Microfinance is the granting of small, unsecured loans to small businesses and entrepreneurs. In poor nations it is very difficult for people to save money to invest in their business or livelihood. Yet capital investment is key to economic growth. A small loan that allows a farmer to purchase better seed or lets a small restaurant owner buy an indoor grill can make a big difference in productivity. Little by little this accumulates into increased output or economic growth.
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Use the following graph to answer the next question.
In the figure, AD2 and AS2 represent the original aggregate supply and demand curves. If Q3 is full-employment output, then AD1 and AS2 represent a(n) ________.
A. full-employment B. expansion C. price stability D. recession
In all economies, investment spending fluctuates
Indicate whether the statement is true or false
What are the main forms through which foreign capital flows into LDCs? Discuss the evolution of the various forms across the last decade
What will be an ideal response?
If a bank has more rate-sensitive assets than rate-sensitive liabilities
A) it reduces interest rate risk by swapping rate-sensitive income for fixed rate income. B) it reduces interest rate risk by swapping fixed rate income for rate-sensitive income. C) it increases interest rate risk by swapping rate-sensitive income for fixed rate income. D) it neutralizes interest rate risk by receiving and paying fixed-rate streams.