ECN 1500 - Quiz 3 Study Questions with Correct Answers 100% Verified 2024/2025

ECN 1500 - Quiz 3 Study Questions with Correct Answers 100% Verified 2024/2025 saver - Correct Answer A consumer who sets money aside for later use borrower - Correct Answer A person who takes loans to pay for investments saving - Correct Answer income not used for consumption investment - Correct Answer the purchase of new capital goods market for loanable funds - Correct Answer Occurs when suppliers of loanable funds (savers) trade with demanders of loanable funds (borrowers). Trading in the market for loanable funds determines the equilibrium interest rate financial intermediaries - Correct Answer banks, bond markets and stock markets intended to connect savers with borrowers and investors bond - Correct Answer Essentially an IOU, but occurs when a firm takes out a loan from a group of people rather than a bank default risk - Correct Answer the risk that the borrower will not pay the face value of a bond on the maturity date collateral - Correct Answer something that becomes the property of the lender if the borrower defaults T-bonds - Correct Answer 30-year bonds; pay interest every 6 months. T-notes - Correct Answer maturities ranging from 2 to 10 years; pay interest every 6 months T-bills - Correct Answer maturities of a few days to 26 weeks; pay only at maturity