Scribd Logo
Upload

Welcome to Scribd!

  • 19 views

    Activity 1

    Uploaded by

    Daisys Tindog
    The financial system allows the exchange of funds between participants like lenders, investors, and borrowers. It facilitates the flow of funds from surplus to deficit areas and runs payment systems for local markets. It plays an important role in an economy by facilitating savings-investment relationships and capital market growth, which supports infrastructure development, trade, employment, and attracting foreign capital. The key elements of the financial system include ultimate lenders and borrowers, financial intermediaries, financial instruments, money creation, financial markets, and price discovery. One element is ultimate lenders and borrowers, which comprise the household, corporate, government, and foreign sectors - who are either lenders or borrowers or both via financial intermediaries. Financial institutions provide

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Activity 1

    Uploaded by

    Daisys Tindog
    19 views2 pages
    The financial system allows the exchange of funds between participants like lenders, investors, and borrowers. It facilitates the flow of funds from surplus to deficit areas and runs payment systems for local markets. It plays an important role in an economy by facilitating savings-investment relationships and capital market growth, which supports infrastructure development, trade, employment, and attracting foreign capital. The key elements of the financial system include ultimate lenders and borrowers, financial intermediaries, financial instruments, money creation, financial markets, and price discovery. One element is ultimate lenders and borrowers, which comprise the household, corporate, government, and foreign sectors - who are either lenders or borrowers or both via financial intermediaries. Financial institutions provide

    Original Title

    Activity_1

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The financial system allows the exchange of funds between participants like lenders, investors, and borrowers. It facilitates the flow of funds from surplus to deficit areas and runs payment systems for local markets. It plays an important role in an economy by facilitating savings-investment relationships and capital market growth, which supports infrastructure development, trade, employment, and attracting foreign capital. The key elements of the financial system include ultimate lenders and borrowers, financial intermediaries, financial instruments, money creation, financial markets, and price discovery. One element is ultimate lenders and borrowers, which comprise the household, corporate, government, and foreign sectors - who are either lenders or borrowers or both via financial intermediaries. Financial institutions provide

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views2 pages

    Activity 1

    Uploaded by

    Daisys Tindog
    The financial system allows the exchange of funds between participants like lenders, investors, and borrowers. It facilitates the flow of funds from surplus to deficit areas and runs payment systems for local markets. It plays an important role in an economy by facilitating savings-investment relationships and capital market growth, which supports infrastructure development, trade, employment, and attracting foreign capital. The key elements of the financial system include ultimate lenders and borrowers, financial intermediaries, financial instruments, money creation, financial markets, and price discovery. One element is ultimate lenders and borrowers, which comprise the household, corporate, government, and foreign sectors - who are either lenders or borrowers or both via financial intermediaries. Financial institutions provide

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    Activity 1.

    Instructions: Please read and answer the following questions.

    1. Define the financial system and discuss its importance in our economy.
    ***Financial system is a system that allows the exchange of funds between financial market
    participants such as lenders, investors, and borrowers. It help in facilitating the flow of funds
    from the areas of surplus to the areas of deficit. It is the one that run the payment systems that
    enable local markets to operate. In our economy, the financial systems has the role for savings-
    investment relationship, it help in the growth of our country’s capital market, security market,
    the growth of infrastructure, the development of trade and employment, to venture capital, to
    ensure a balanced growth, for fiscal discipline and control of our economy, for attracting
    foreign capital, for economic integration, for political stability, and for the uniformity of interest
    rates.

    2. Enumerate the elements of the financial system and explain one.


    ***The essential elements of the financial system are the following;
     ultimate lenders and borrowers
     financial intermediaries
     financial instruments (assets)
     creation of money
     financial markets
     price discovery
     One of the elements of the financial system is the ultimate lenders and borrowers. The
    ultimate borrowers comprise the four broad sectors of the economy which are the
    household sector, the corporate or business sector, government sector, and foreign
    sector. The same non-financial economic sectors appear on the other side of the
    financial system as ultimate lenders. The members of the four sectors are either the
    lenders or borrowers or both at the same time. An example of being the lender-
    borrower is government. The governments of most countries are permanent borrowers
    which usually of long-term, while at the same time having short-term funds in their
    accounts at the central bank/private banks, pending spending. The borrowing and
    lending takes place either directly or indirectly via the financial intermediaries.

    3. What are the functions of the financial institutions? Explain.


    ***The functions of the financial institutions are to provide loans and advances to the
    customers, the rate of return is very high in case of investment made in this type of institution,
    it also gives a rated consultancy to the customers for their beneficial investments, it serves as a
    depository for the customers, it makes an effort to minimize the monitoring cost of the
    company, and all the finance related work is done by the financial institution or on behalf of the
    customers. The financial institutions provide the best way to invest the money and to earn good
    returns from that investment. It try to help our nation in building up economies. They provide a
    very unique and advanced way to keep the money safe. The customers should also understand
    that the institutions carry some risk factors associated with their services. The customers
    should carefully understand the policies of the institutions and check the non-performing asset
    of the company before investing their money in the financial institutions.

    4. Create a venn diagram about banking institutions and non-bank financial institutions.

    5. Why is there a need to study the financial system?


    ***There is a need to study the financial system because it is the one that has a very important
    role in our economy. It enables the financial intermediation process which facilitates the flow of
    funds between savers and borrowers, ensuring the financial resources are allocated efficiently
    towards promoting economic growth and development.

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy