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Author Question: What are the three types of financial institutions that accept deposits that are part of the U.S. ... (Read 81 times)

K@

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on: Jun 29, 2018
What are the three types of financial institutions that accept deposits that are part of the U.S. money supply? Briefly describe each of the three types of financial institutions.
 
  What will be an ideal response?

Question 2

If imports are 1,200 billion and exports are 1,300 billion, while net interest income and net transfers are zero, what is the current account balance?
 
  What will be an ideal response?


gcook

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The three institutions are commercial banks, thrift institutions, and money market funds. Commercial banks are financial firms that accept deposits and make loans. There are about 8,600 commercial banks in the United States. Thrift institutions include savings and loan associations, savings banks, and credit unions. These firms also accept deposits and make loans. The last type of financial institution is money market funds. Money market funds obtain funds by selling shares and using the proceeds to buy assets such as U.S. Treasury bills.

Answer to Question 2

The current account balance equals exports minus imports, or 1,300 billion minus 1,200 billion, which is 100 billion.


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