Podcast
Questions and Answers
What is the core function of the financial system according to the functional approach?
What is the core function of the financial system according to the functional approach?
- Reducing the conflict between surplus-fund and deficit-fund agents
- Introducing money to facilitate barter exchange
- Allocating resources over space and time (correct)
- Facilitating specialisation and exchange
Which approach concerns the relationship between financial structure and provision of financial services?
Which approach concerns the relationship between financial structure and provision of financial services?
- The market-based approach
- The instrumental approach
- The functional approach (correct)
- The institutional approach
What is the role of money in economic growth according to the instrumental approach?
What is the role of money in economic growth according to the instrumental approach?
- Allocating resources over space and time
- Resolving conflict between surplus-fund and deficit-fund agents (correct)
- Providing financial security
- Facilitating specialisation and exchange
What facilitates specialisation and exchange?
What facilitates specialisation and exchange?
What is the focus of the institutional approach?
What is the focus of the institutional approach?
What does the introduction of money resolve according to the text?
What does the introduction of money resolve according to the text?
What is the primary function of the financial system according to the functional approach?
What is the primary function of the financial system according to the functional approach?
Which function of the financial system involves encouraging the emergence of the best entrepreneurs and promoting the best technological innovations?
Which function of the financial system involves encouraging the emergence of the best entrepreneurs and promoting the best technological innovations?
What is the key uncertainty related to a future course of events called?
What is the key uncertainty related to a future course of events called?
How do capital markets help to overcome savers' reluctance to lose liquidity for a long time?
How do capital markets help to overcome savers' reluctance to lose liquidity for a long time?
Which aspect discourages small investors from contributing to the production process within an economy?
Which aspect discourages small investors from contributing to the production process within an economy?
What encourages financial intermediaries to encourage entrepreneurs to avoid risks?
What encourages financial intermediaries to encourage entrepreneurs to avoid risks?
What function is performed by financial institutions by transferring the ownership of the project to different shareholders?
What function is performed by financial institutions by transferring the ownership of the project to different shareholders?
What is the uncertainty involved in converting assets into money known as?
What is the uncertainty involved in converting assets into money known as?
'Asymmetry of information' problem is related to the reduction of which costs?
'Asymmetry of information' problem is related to the reduction of which costs?
What is the key determinant of the quality of the financial system, according to the legal-based approach?
What is the key determinant of the quality of the financial system, according to the legal-based approach?
What is the 'Agency' problem related to?
What is the 'Agency' problem related to?
What gives fund providers the right to appeal to the courts to enforce their rights?
What gives fund providers the right to appeal to the courts to enforce their rights?
What stimulates research on the quality of financial services provided, according to the text?
What stimulates research on the quality of financial services provided, according to the text?
What is the primary concern of the legal-based approach with regards to the financial system?
What is the primary concern of the legal-based approach with regards to the financial system?
What does the 'Agency' problem in corporate governance refer to?
What does the 'Agency' problem in corporate governance refer to?
What can deter small investors from investing in a specific project according to the text?
What can deter small investors from investing in a specific project according to the text?
What is one fundamental explanation for investors providing funds when they are optimistic about the future of projects?
What is one fundamental explanation for investors providing funds when they are optimistic about the future of projects?
What is likely to lead to weak portfolios in the banking system according to the text?
What is likely to lead to weak portfolios in the banking system according to the text?
What do low nominal interest rates below the equilibrium market discourage according to the text?
What do low nominal interest rates below the equilibrium market discourage according to the text?
What is increased at the international level following financial liberalization?
What is increased at the international level following financial liberalization?
What is stimulated by a newly liberalized financial system following financial liberalization?
What is stimulated by a newly liberalized financial system following financial liberalization?
What is one feature of financial system distortion according to the text?
What is one feature of financial system distortion according to the text?
What is one impact of financial distortion in the financial market according to the text?
What is one impact of financial distortion in the financial market according to the text?
What does a high interest rate ceiling do to the discount factor in many LDCs, according to the text?
What does a high interest rate ceiling do to the discount factor in many LDCs, according to the text?
What does financial liberalization incentivize firms to do, according to the text?
What does financial liberalization incentivize firms to do, according to the text?
