QUESTION 22 B2 Western Australia Credit Bank (WACB) issues bonds to households who are not depositors in that bank. WACB makes a loan to a commercial company, Agrogreen, which is a depositor in that bank. Agrogreen is funding the building of a new ecological farm. The households fund their investment with accumulated past savings and hold their bank deposits in Australia Capital Territory Credit Bank (ACTCB). a) Using a flow-of-funds diagram incorporating the surplus spending units, deficit spending units, financial intermediary, financial markets and payment system illustrate how the funds and the financial instruments circulate in the financial system. In your diagram make a clear distinction between bank deposits and ESF, and indicate money and instrument creation/destruction where relevant. (9 marks) b) Explain the role of banks in that story. (1 mark) Write your answers on a new sheet of paper preferably without lines; write your full name and student number at the top of the sheet; scan or take a photo; convert into pdf and upload one pdf file on the link below. Keep the sheet with your answers for future reference. Attach File Browse My Computer QUESTION 22 B2 Western Australia Credit Bank (WACB) issues bonds to households who are not depositors in that bank. WACB makes a loan to a commercial company, Agrogreen, which is a depositor in that bank. Agrogreen is funding the building of a new ecological farm. The households fund their investment with accumulated past savings and hold their bank deposits in Australia Capital Territory Credit Bank (ACTCB). a) Using a flow-of-funds diagram incorporating the surplus spending units, deficit spending units, financial intermediary, financial markets and payment system illustrate how the funds and the financial instruments circulate in the financial system. In your diagram make a clear distinction between bank deposits and ESF, and indicate money and instrument creation/destruction where relevant. (9 marks) b) Explain the role of banks in that story. (1 mark) Write your answers on a new sheet of paper preferably without lines; write your full name and student number at the top of the sheet; scan or take a photo; convert into pdf and upload one pdf file on the link below. Keep the sheet with your answers for future reference. Attach File Browse My Computer