What are the five functions performed by financial intermediaries?
What will be an ideal response?
(1) Pooling the resources of small savers; (2) providing safekeeping and accounting services as well as access to the payments system; (3) supplying liquidity, converting savers' balances directly into a means of payment when needed; (4) providing ways to diversify risk; and (5) collecting and processing information in ways that reduce information costs.
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A simplified representation of the real world that is used to explain economic phenomena is a(n)
A. model. B. assumption. C. viewpoint. D. implication.
As the elasticity of demand falls, the tax burden is shifted from the _____ to the _____.
Fill in the blank(s) with the appropriate word(s).
A fall in the federal funds rate leads to
A) a decrease in the quantity of money. B) a rise in the real interest rate. C) a decrease in investment. D) a rise in the price level. E) a decrease in real GDP.
The poverty rate is defined as the percentage of the
A) population that is exempt from paying federal income taxes. B) population who qualify to receive welfare payments and food stamps. C) labor force that is poor according to the federal government's definition of poverty. D) population that is poor according to the federal government's definition of poverty.