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Running head: FINANCE QUESTIONS
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Finance Questions
Name
Institution
FINANCE QUESTIONS
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Q. 1. How Financial System Coordinate Saving and Investment.
The financial system coordinates saving and investment by efficiently making use of the
economy’s scarce resources. This happens with the law ofsupply and demand. Demand for
loanable funds is initiated by investors who wish to borrow whereas those who want to save their
extra income supply the loanable funds(Walras, 2004). To achieve this, the financial system
consists of institutions which provide funds to borrowers directly or indirectly.
Financial markets provide money directly to bo...
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