How do economists define equilibrium in financial markets?

Q: Lowering the taxes on income can help in expanding the activities in the financial market.  True or…

A: Tax in the compulsory payment made by the individual or institution to the government without…

Q: Mr. John Dela Cruz, wanted to start investing in the stock market, which of the following financial…

A: In a market, there are different industries and different types of markets for different types of…

Q: discuss the notion of efficient markets when extended to international financial markets.

A: According to the Efficient Market, all stocks trade at their true value. The idea believes that…

Q: What are the factors the can keep interest rates high? discuss it with the help of articles in…

A: A charge known as an interest rate is associated with lending money. Interest provides some…

Q: How Forecasting plays an important role in stock market?

A: Forecasting plays an important role in stock market. Forecasting the future changes in stock market…

Q: During the recession of 2008, it was suggested that some banks were “too big to fail” (TBTF). Under…

A: "Too big to fail" refers to a company or industry that is seen to be so established in the financial…

Q: What are the financial markets? What are the parties of the capital market?Explain it.

A: For the smooth operation of a capitalistic system, entrepreneurs and businesses rely on finance that…

Q: Briefly discuss two (2) risks that a bank faces when it takes in short term savings deposits and…

A: Banks always lend using deposits made by the customers. But it is not recommended to lend using…

Q: What is a lender of last resort? An institution, typically a financial institution, that can provide…

A: Concept of Lender of Last resort is related to central bank of a country. The central bank of a…

Q: When frequency, asset specificity and uncertainty rise, what happens to the cost of using the…

A: The transaction costs involves in the exchanges between two economic agents in an economy. The…

Q: Why are companies' liquidity ratios calculated?

A: Definition of Liquidity Ratio- A liquidity ratio is a type of financial ratio used to determine the…

Q: What happens to interest rates in the market if the stock brokerage commission declines? Explain the…

A: In the stock market, interest rate is influenced by various market variables, such as demand,…

Q: “Fat finger” trades are sometimes blamed as the cause of “flash crashes” in financial markets. What…

A: What is a Flash Crash?  A flash crash can be defined as an occasion in electronic protections…

Q: 1. What is the efficient market theory? 2. What is "Alpha"? 3. Describe the basics of "financial…

A: As you have asked multiple questions, only the first one will be answered. 1. The efficient market…

Q: Why is it hard to forecast future movements in stock prices?

A: Stock prices: The stock prices are the current prices that a share of a stock is trading in the…

Q: List any six categories of factors that could cause a financial crisis.

A: Since , financial crisis in a economy is a situation where  the value of the assets fall drastically…

Q: What are the difference between public and private finance?

A: Public finance refers to the study regarding the income and expenditure of the government. It…

Q: Market interest rates are established by the banks or any financial institutions. True or false?

A: Answer -  Market Interest rate - It is the interest rate given on the deposits or other investments…

Q: what happens if consumers expect future interest rates to fall?

A: An interest rate is the amount of money a lender charges a borrower for the use of money, expressed…

Q: Can the risk of a housing bubble be averted?

A: The housing bubble caused the economic recession in the 2007 which turned out to be the biggest…

Q: What is the relation between social economic and the financial crisis? What is the impact of…

A: Solution: Economics: It is the study of understanding different aspects of economy.  Economy: It is…

Q: what vital role do demand and supply play in the stock exchange?

A: The Law of demand states the inverse relationship between the quantity demanded of a good and the…

Q: How can market forces of supply and demand affect interest rates and the economy

A: The demand and supply affect interest rates in the money market. The money market is the market that…

Q: How do information asymmetries affect financing decisions?

A: Answer - Asymmetric Information - This is th situation where one individual, firm or even country…

Q: The demanders of funds participate in the financial market to earn profit. * True or False??

A: Individuals and businesses who save money and make financial investments are the suppliers of funds…

Q: In 2008 there was an increase in uncertainty about the quality of structured financial products that…

A: A mortgage or a group of mortgages serve as the collateral for a mortgage-backed security, or MBS.…

Q: urrently the Federal Reserve is gradually raising interest rates. What challenges come with doing…

A: The Federal Reserve increases or decreases the interest rates depending upon the economic activity.…

Q: Which three factors will shift the supply of bonds to the left?

A: In economics, the concept of supply is used to determine the quantity of a commodity or service…

Q: Would usury laws help or hinder resolution of a shortage in financial markets?

A: We know that Usury law is implemented by the government pertaining to interest on the loans taken by…

Q: What is financial crisis? What causes financial crisis? Is it possible it could happen again? Give…

A: Financial market disruption caused by decreasing asset values and insolvency among debtors and…

Q: In the financial market, what causes a movement along the demand curve? What causes a shift in the…

A: A Demand curve represents the relationship between the price and the quantity demanded. This is…

Q: Briefly explain three reasons for regulating financial markets. How does each reason improve…

A: Financial market regulations are rules and restrictions imposed on the financial market of an…

Q: If interest rates increase in financial markets, then...

A: Interest rates are defined as the charges taken by the lenders for the money lent ti the borrower.…

Q: What would happen if suddenly banks stop lending (this has happened in the past)? Can it grow?

A: When one or more individuals, businesses, or other entities lend money to additional individuals,…

Q: What are the empirical evidences in favor of and against the efficient market hypothesis?

A: The EMH often known as the efficient market theory, asserts that stock prices reflect all available…

Q: In an attempt to stimulate the economy, the Government has announced a $23.9 billion increase in its…

A: When aggregate demand and supply are equal of goods then goods market is said to be in equilibrium.…

Q: Why are financial intermediaries willing to engagein information collection activities when…

A: The financial intermediaries provide different instruments to their customers. They provide…

Q: Mortgage lenders often resell mortgages in secondary markets. How might this make lenders act…

A: Answer- Mortgage lenders often resell mortgages in secondary markets so The secondary mortgage…