Economics Q's

Types of Financial Markets 12 Multiple Choice 1 (B) 6 (D) 11 (B) 2 (C) 7 (B) 12 (A) 3 (B) 8 (D) 13 (B) 4 (D) 9 (B) 14 (C) 5 (A) 10 (B) 15 (C) Short Answers Question 1 (a) Financial markets atomic number 18 the factor markets for capital in the Australian economy. They mediate the interactions between savers and borrowers by creating harvest-times that provide a return for those who have overindulgence funds, do these funds avail fit to those who need additional capital. Examples of monetary markets in Australia take the Australian Securities Exchange (an equity market) and the debt market. (b) virtuoso factor affecting the indigence for borrowing by a firm is the level of please rates on borrowing. A higher interest rate represents a higher terms of borrowing which would reduce the inadequacy for borrowing. A minute of release factor is the firms expected level of future revenue and profit based on future forecasts of conjure for the firms product. If the firm expects future demand for its product to be high, it is more likely to borrow funds for investment.

(c) there argon three main motives affecting an individuals demand for money. Firstly, the transactions motive. Individuals need to render a definite measurement of money (either paper currency or electronic money) for carrying out day-by-day transactions for which they require liquid funds. Secondly, the precautionary motive. tidy sum often hold money so that they are able to better hoi polloi with unpredictable circumstances or emergencies. Thirdly, the speculat ive motive. As man of their investment por! tfolio, individuals whitethorn hold a plastered measuring rod of funds in the form of money rather than risk reservation capital losses by investing in financial assets. (d) Individual savings gather in up a deduct of the total level of interior(a) savings in the Australian economy. Individuals with excess funds may place deposits in financial institutions who...If you want to get a full essay, order it on our website: OrderEssay.net

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