1. A. Identify and explain the functions of financial intermediation. B. Why does the lack of an efficient and effective system of financial intermediation act as an impediment to the economies in developing countries (comprehensive answer required)?

1. A. Identify and explain the functions of financial intermediation. B. Why does the lack of an efficient and effective system of financial intermediation act as an impediment to the economies in developing countries (comprehensive answer required)?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA1: International Financial Reporting Standards

Section: Chapter Questions

Problem 6MCQ

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Concept explainers

Flow of Funds

The flow of funds is the financial accounts of the nation, which monitor and control the cash flow among various sectors or industries, or markets. Central banks use these flow of funds statements to acquire macroeconomic data, to publish cash inflow and cash outflow statements of the nation. This flow of funds system is utilized to identify economic activity and changes in the economy. It is used by Federal Reserve to determine the Gross Domestic Product (GDP) of the nation and to implement monetary policy and fiscal policies.

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1. A. Identify and explain the functions of financial intermediation.

B. Why does the lack of an efficient and effective system of financial intermediation act as an impediment to the economies in developing countries (comprehensive answer required)?

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