question 1

a) Explain liquidity preference theory of interest and what forces cause the equilibrium interest rate to move?

b) Explain the central banks tools of monetary policy and what monetary tool is uses to change the money supply.

question 2

a) What are the principal purposes or goals of financial institutions regulation?

b) Why are regulators concerned with the levels of capital held by an FI compared to a nonfinancial institution?

question 3

Explain the principal alternatives sources of funds for a business, household, or unit of government is in need of additional funding and factors that these different economic units should consider when they have to choose among different sources of funds.