100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
ECS3701 Assignment 2 Full Solutions Semester 2 2024 (833935) - DUE 27 September 2024 R50,89   Add to cart

Exam (elaborations)

ECS3701 Assignment 2 Full Solutions Semester 2 2024 (833935) - DUE 27 September 2024

 14 views  2 purchases

ECS3701 Assignment 2 (COMPLETE QUESTIONS & ANSWERS) Semester 2 2024 (833935) - DUE 27 September 2024 ;100 % TRUSTED workings, Expert Solved, Explanations and Solutions. For assistance call or W.h.a.t.s.a.p.p us on ...(.+.2.5.4.7.7.9.5.4.0.1.3.2)........... 2.01 Discuss how collateral and indirect ...

[Show more]

Preview 2 out of 10  pages

  • September 25, 2024
  • 10
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
book image

Book Title:

Author(s):

  • Edition:
  • ISBN:
  • Edition:
All documents for this subject (83)
avatar-seller
LIBRARYpro
ECS3701
ASSIGNMENT 2 SEMESTER 2 2024
UNIQUE NO.833935
DUE DATE: 27 SEPTEMBER 2024

, ECS3701

Assignment 2 Semester 2 2024

Unique Number: 833935

Due Date: 27 September 2024

Monetary Economics

2.01: Collateral and Indirect Finance in Explaining Financial Structure

Collateral and indirect finance play key roles in understanding how financial systems
operate worldwide. Collateral refers to assets that a borrower offers to a lender to
secure a loan. It's like a safety net for lenders because, if the borrower defaults, the
lender can seize the collateral to recover their losses. This is crucial because many
borrowers, especially businesses or individuals with less creditworthiness, may not be
able to get loans without offering something valuable as a guarantee.

Indirect finance involves financial intermediaries, like banks, who stand between
borrowers and savers. Instead of lending money directly, savers deposit funds into a
bank, and the bank then lends those funds to borrowers. This system makes financing
more accessible and efficient, as it allows banks to assess credit risks, bundle deposits,
and provide loans to a wider pool of borrowers.

These two factors—collateral and the role of intermediaries in indirect finance—explain
why direct finance (where borrowers go directly to investors) is much less common
globally. Most borrowers lack the reputation or scale to raise funds directly, so they rely
heavily on banks and other intermediaries, who in turn, ask for collateral to manage risk.
This is how most financial systems are structured, with intermediaries playing a major
role in ensuring money flows smoothly between those who need it and those who have
it.




2.02: Financing Government Deficits: Monetizing Debt and Printing Money

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying this summary from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller LIBRARYpro. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy this summary for R50,89. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

78252 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy summaries for 14 years now

Start selling
R50,89  2x  sold
  • (0)
  Buy now