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answer all of the following questions 5. Suppose that in the economy of a country, the demand for money is greater than the supply. What
answer all of the following questions
5. Suppose that in the economy of a country, the demand for money is greater than the supply. What is likely to occur? a the demand curve for money will shift to the left b. nominal interest rates will increase c. the demand curve for money will shift to the right d. nominal interest rates will decrease e. The amount of investment will increase 6. Which statement is not correct? a. The primary function of the financial system is to facilitate well the flow of funds in the economy, from those who have surplus funds but can't utilize them to those who have deficiency of funds but have productive use for the funds b. The president and the congress sets fiscal policies that are geared towards counteracting excessive spending and borrowing during economic boom and encouraging spending during economic depression c. Financial Institutions like banks, insurance companies and mutual funds, are entities that receive funds from savers and invest the funds in securities issued by borrowers d. The Philippines Stock Exchange is the primary capital market of the Philippines where the debt and equity securities of publicly listed corporations are traded e none of the above 7. Which of the following policies can the central bank complete to decrease the money supply? a Increase the reserve ratio b. raise the fed funds rate c. buy bonds in the open market d lower the discount rate I e increase payroll taxes 8. Suppose that the economy of a country is operating where aggregate output is greater than the full employment output. Which policy would be best to the central bank to implement? a contractionary monetary policy b. expansionary monetary policy clet the economy self correct d expansionary fiscal policy e contractionary fiscal policy 9. Which statement is not correct? a. The main objective (role) of financial intermediaries is to convert savings of SSU's into investments. b. Financial intermediaries purchase financial claims with a set of characteristics from DSU's and sell financial claims with characteristics tailored to the desires of the SSU's. c. Financial intermediaries normally absorb the risks from SSU's and manage the risks by investing the funds received from SSU's into various securities d. Financial intermediaries serve solely as intermediaries with the financial markets and never serve as investors e none of the aboveStep by Step Solution
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