Which of the following is not a benefit to lenders of financial intermediation?
a. Lower credit risks than the direct market.
b. Lower liquidity risk than the direct market.
c. Lower market risk than the direct market.
d. More convenient than the direct market.
e. All the above are benefits.
Question 2 - Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and real GDP falls.
b. The real risk-free interest rate falls, and real GDP rises.
c. The real risk-free interest rate rises, and real GDP remains the same.
d. The real risk-free interest rate and real GDP remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 3 - Which of the following is not a benefit to lenders of financial intermediation?
a. Higher liquidity than the direct market.
b. Lower credit risks than the direct market.
c. Lower liquidity risk than the direct market.
d. Lower market risk than the direct market.
e. All the above are benefits.
Question 4 - Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and GDP Price Index rises.
b. The real risk-free interest rate falls, and GDP Price Index falls.
c. The real risk-free interest rate rises, and GDP Price Index falls.
d. The real risk-free interest rate and GDP Price Index remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 5 - Which of the following is not a benefit to lenders/investors of financial intermediation?
a. More diversification than the direct market.
b. More convenient than the direct market.
c. Higher yield than the direct market.
d. All the above are benefits to lenders.
e. Lower risks than the direct market.
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