Money and Banking 2

Question 1

institutions that borrow
funds from people who have saved and make loans
to other people

Answer 1

Financial Intermediaries

Question 2

accept deposits and make loans

Answer 2

Banks

Question 3

Other Financial Institutions

Answer 3

insurance companies, finance

companies, pension funds, mutual funds, and investment companies

Question 4

the development of new

financial products and services

Answer 4

Financial Innovation

Question 5

crises are major disruptions in
financial markets that are characterized by
sharp declines in asset prices and the
failures of many financial and nonfinancial
firms.

Answer 5

Financial Crisis

Question 6

is the management of the money

supply and interest rates

Answer 6

Monetary policy

Question 7

deals with government spending

and taxation

Answer 7

Fiscal policy

Question 8

is where
funds are converted from one currency
into another

Answer 8

foreign exchange market

Question 9

is the price of
one currency in terms of another
currency

Answer 9

The foreign exchange rate