Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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The presence of a well developed financial market and a wide array of financial instruments is beneficial to the overall economy since the flow of funds would be greater. *
True or False?
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- Suppose that the city of New York issues bonds to raise money to pay for a new tunnel linking New Jersey and Manhattan. An investor named Susan buys one of the bonds on the same day that the city of New York pays a contractor for completing the first stage of construction. Is Susan making an economic or a financial investment? What about the city of New York?arrow_forwardHow do the sophisticated financial systems of modern economies affect the relationship between saving and investment?arrow_forwardInvestors must go for investments that are liquid to ensure availability of funds when needed. Is it true or false?arrow_forward
- Which statement is TRUE regarding financial capital?arrow_forwardA well-functioning financial system does all of these EXCEPT: a. foster economic growth by directing savings to its most productive use. b. allocate risk among market participants. c. eliminate systematic risk through diversification. d. direct resources from savers to borrowers.arrow_forwardExplain in a few paragraphs why interest rates have recently been increased in Australia? Use economic theory and models.arrow_forward
- "Knowing how to secure your financial well-being is one of the most important things you'll ever need in life. You don't have to be a genius to do it. You just need to know a few basics, form a plan, and be ready to stick to it. No matter how much or little money you have, the important thing is to educate yourself about your opportunities. At the SEC [Securities and Exchange Commission], we enforce the laws that determine how investments are offered and sold to you. These laws protect investors, but you need to do your part, too. No one can guarantee that you'll make money from investments you make." Use the excerpt from the SEC's Guide to Saving and Investing to answer the following. Be sure to write in complete sentences. Explain different types of investments and savings accounts and how they help your money grow over time. Describe the importance of government agencies, like the SEC, in protecting your investments.arrow_forwardTrue or false: Investors and lenders are the same group of peoplearrow_forwardWhat group of people benefits from a higher interest rate? Explain how they benefit.arrow_forward
- Which of the following is not a key dimension of financialization? Private equity Profits via the global sale of goods and services Public sector budget austerity Share price maximizationarrow_forwardExplain the nature of individual and business decisions which drive the demand and supply of financial capital. Specifically. what kinds of factors will shift demand and supply of financial capital?arrow_forwardDescribe the Net present-worth with an example?arrow_forward
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