Flashcards in Exam 3 - Chapter 14 Deck (10):
3 examples of Future Claims in a financial market
5 examples of Buyers (Borrowers)
Families buying a house
Student taking loans for college
Corporations building factories
Entrepreneurs starting new ventures
3 examples of Savers
Putting money into mutual savings or savings accounts
Who serves as the intermediary between Borrowers and Savers in a financial market?
___ is when the bank makes cash more readily accessible when and where you want it.
Explain bank Risk Diversification
-bank relies on many borrowers to collect it's investment
-if the investment fails, bank will be able to recollect most of its money
What is the market for loanable funds? What does "loan-able" funds refer to?
-shows buyers and sellers
*dollars available between buyers and sellers is the loanable funds
In the market for loanable funds, what is the Demand and Supply?
Supply = Savings
Demand = Investments
3 determinants of Investment curve in Market for Loanable funds?
-future profitability of investments