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Money, Banking and Financial Markets, 5th Edition Solution Manual

Money, Banking and Financial Markets, 5th Edition Solution Manual makes studying stress-free with well-organized chapter insights.

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Chapter 01 An Introduction to Money and the Financial System1-1Chapter 1An Introduction to Money and the Financial SystemProblems1.List the financial transactions you have engaged in over the past week. Howmighteach one have been carried out 50 years ago?(LO1)Answer: Commercial purchases that you made likely used credit cards and debitcards.Fiftyyears ago they would have all used cash. Payment of utilities (if you doit) might have been done by electronic transfer, rather than a check (which wouldhave been the method 50years ago).2.Howwereyou,oryour family oryourfriendsaffected by therecentfailure of thefinancial system to function normallyduring the financial crisis of 2007-2009?(LO1)Answer: It is likely that you or someone you knowhad an account with one of themany financial institutions that folded during the crisis, or that someone you knowwas refused a business loan or a mortgage or had a bank foreclose on their house.3.List three items you used to buy with cashbut you now purchase witha debit card.(LO1)Answer: Among the possibilities: purchases of cappuccino at the local coffee shop,gasoline for your car, and groceries for the week.4.Various financial instrumentsusually serve one of two distinct purposes: to storevalue or to transfer risk.Name a financial instrumentused foreach purpose.(LO1)Answer: Financial instruments used to store value include bank accounts, stocks andbonds. Instruments used to transfer risk include car insurance and lifeinsurance.5.Financial innovation has reduced individuals’ need to carry cash. Explain how.(LO1)Answer: Everyone has a number of alternative methods of payment. Electronicforms, like credit and debit cards, are the primary ones that have reduced need tocarry cash.

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Money, Banking And Financial Market...

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