Question
1. Explain why disintermediation (Intra intermediation) is such an important concept for understanding financial markets and the economys health. 2. The Classical Theory of Interest
1. Explain why disintermediation (Intra intermediation) is such an important concept for understanding financial markets and the economys health.
2. The Classical Theory of Interest Rates holds that it never makes sense to hold money given the Substitution Effect. The Liquidity Preference Theory presents an argument that it does make sense to hold money under the Speculative Motive. Explain the Substitution Effect and compare/contrast to the Speculative Motive.
3.What are the six potential services provided by financial intermediaries as compared to Direct Finance? (You may simply list the six.)
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