1. a) b) Lending money is a function that can take place only after. adequate government regulation can protect the bank's money the cost of funds to the bank can be guaranteed for the term of the loan enough clients have decided to place their funds on deposit with the bank economic information correctly predicts the profit a bank can make from lending 2. A common denominator that joins all of us, together, in our economy is the fact that we consume defer income save for retirement try to negotiate lower taxes 3. For a person's transactional needs: when inflation increases, the person's demand for money will: b) increase decrease remain the same shift away from transactions Page 4 of 14 4. The major Canadian banks tend to be described as being risk-takers, but only with secured investments risk-avoiders, unless the return exceeds certain benchmarks risk-averse risk-neutral 5. In Canada, functional regulation is the most important form of regulation and is spear. headed by the b) c) d) NHRA OSFI SCCA FISA