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Eco 4223 Exam 4 Quiz Questions And Answers With Verified Solution 100% Correct (GRADED A+)
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Eco 4223 Exam 4 Quiz Questions And Answers With Verified Solution 100% Correct (GRADED A+)
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Eco 4223 Exam 4 Qu iz Questions And Answers With Verified Solution 100% Correct (GRADED A+) When people buy a _____, they are buying a share of ownership in a company. - ANSWER✔✔ Stock By _____ resources from many depositors, a bank is able to fund larger loans than an individual would be able to fund on her own. - ANSWER✔✔ pooling In general, people use financial intermediaries because they reduce _____ in the market for loanable funds . - ANSWER✔✔ transaction costs Suppose some unit cost must be incurred to transact in the market for loanable funds. This will typically result in an interest rate spread, where the rate the borrower pays is _____ the rate the saver receives. - ANSWER✔✔ greater than If financial innovation reduces transaction costs, the quantity of funds borrowed will _____ and the quantity of funds lent will _____. - ANSWER✔✔ increase; increase Financial _____ denotes the extent to which wealth is held in the banking sy stem (or, financial institutions more broadly). It is typically estimated by dividing a country's total private credit by its gross domestic product. - ANSWER✔✔ depth A business that raises funds directly from its customers in exchange for rewards, promot ions, or future products is engaged in _____. - ANSWER✔✔ crowdfunding According to an article published in The Economist on May 9th, 2015, "the fintech revolution will reshape finance" by: - ANSWER✔✔ - cutting costs and improving the quality of financial services - employing clever new ways of assessing risk - creating a more diverse, and hence stable, credit landscape According to a September 18, 2021 article in The Economist, _____ refers to "applications and functions" that "are run not by a single cen tralized entity or company, but by user -operated 'decentralized autonomous organization's - ANSWER✔✔ De-Fi ______ tokens represent unique assets, like an image or a video. - ANSWER✔✔ Non -Fungible Tokens (NFTs) By pooling resources, a bank helps individua ls deal with the _____ problem, which results when savers and borrowers have different desired loan durations. - ANSWER✔✔ maturity mismatch A bank is _____ if the value of its assets exceeds the value of its liabilities - ANSWER✔✔ solvent Some of the assets a bank holds (e.g., long -duration loans) are _____, meaning they cannot be converted to cash quickly without loss of value. - ANSWER✔✔ illiquid A bank _____when the bank's customers demand to be repaid the funds they are owed en masse. A bank _____ results when a bank is forced to liquidate its assetsThe benefits of buying summaries with Stuvia:
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