1 - Explain why Analytical Problems 5 If offered the choice...

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Chapter 01 An Introduction to Money and the Financial System 1-1 Chapter 1 An Introduction to Money and the Financial System Conceptual Problems 1. What are your main sources of local and international financial news ? 2. Financial innovation has reduced individuals’ need to carry cash. Explain how. 3. When you apply for a loan, you are required to answer a lot of questions—why? Why is the set of questions you must answer standardized? 4. The government is heavily involved in the financial system.
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Unformatted text preview: Explain why. Analytical Problems 5. If offered the choice of receiving $1000 today or $1000 in one year’s time, why would you choose the first option? 6. Suppose financial institutions didn’t exist but you urgently needed a loan. Where would you be most likely to get this loan? Using core principles, identify an advantage and a disadvantage this arrangement might have over borrowing from a financial institution....
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