Raviq Ayusi | Ipirel A 2012 | 20120510220 | Tugas Macroeconomic 2012
Assignment in Macroeconomic (N. Gregory Mankiw), page 284 ‘question for review’ number 1.
1. What is the role of the financial system? Name and describe two markets that are part of the financial system in our economy. Name and describe two financial intermediaries.
Answers:
The financial systems consist of the institutions that help to match one person’s saving with another person’s investment. At the broadest level, the financial system moves the economy’s scarce resource from savers (people who spend less than they earn). Financial institutions that help coordinate savers and borrowers.
Financial institutions can be grouped into two categories:
1. Financial markets: Financial institution through which savers can directly provide funds to borrowers. The most important financial markets in our economy are the bond market and the stock market.
2. Financial intermediaries: Financial institution through which savers can indirectly provide funds to borrowers. The most important financial intermediaries – banks and mutual funds.
1. Financial markets: Financial institution through which savers can directly provide funds to borrowers. The most important financial markets in our economy are the bond market and the stock market.
2. Financial intermediaries: Financial institution through which savers can indirectly provide funds to borrowers. The most important financial intermediaries – banks and mutual funds.
Bank: are the financial intermediaries with whom people are most familiar. Is taken in deposits from people who want to save and use these deposits to make loans to people who want to borrow.
Mutual Funds: is an institution that sells shares to the public and uses the proceeds to buy a selection, or portfolio, of various type of stock, bonds, or both stocks and bonds.
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