Question

In: Finance

The market for modern abstract paintings would be considered to be a “deep” market. A. T...

The market for modern abstract paintings would be considered to be a “deep” market.

A. T

B. F

An example of a contractual savings institution would be a commercial bank, as they make borrowers sign loan contracts for all loans.

A.T

B. F

Households will generally supply more funds to the loanable funds markets as their income and wealth increase, all else being equal ( ceteris paribus).

A. T

B. F

Thank you.

Solutions

Expert Solution

1.the market for modern abstract painting would be considered THIN market because there would be a very small number of buyers and the spread will also be very wider because there would be less volume and lesser presence of buyers.

The given statement is false because it is not a deep market.

2. The given statement is FALSE because contractual savings institutions are institutions who will be involved in fund collection under long term contractual agreement with intention to invest them in long term instrument of debt and equity so this will only include insurance companies along with pension Fund companies.

Commercial bank are not an example of contractual savings institution.

3. The given statement is TRUE because household will generally supply more funds to the loanable funds market when their wealth will be increasing as this is a sign of increasing demand and increasing money flow

The given statement is TRUE.

jeff jeffy answered 1 year ago
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