Reference no: EM133120579
DETERMINE IF THE STATEMENT IS TRUE OR FALSE
1. Households can only be considered as suppliers of funds in the financial market.
2. The government is generally a demander of funds.
3. The money supply curve is vertical and does not vary based on the interest rate.
4. As the interest rate increases, the opportunity cost of holding money decreases as well.
5. The level of activities in the financial system is a good measure of how the economy might be performing.
6. A decrease in real GDP will cause the money demand curve to decrease.
7. Greater availability of savings can be facilitated through an efficient financial system.
8. High reserve requirement encourages bank to lend money by forcing them to hold more cash.
9. The financial market is under the direct supervision of the Bangko Sentral ng Pilipinas (BSP).
10. Inflation reduces the purchasing power of money, simulating an increase in interest rates on investment assets, and so raising the opportunity cost of holding money.