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?
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.
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If consumers save the entire amount of the increase in their disposable income due to a tax cut, the ________
A) tax cut will lead to a decrease in GDP B) tax cut will lead to an increase in GDP C) tax cut will lead to an increase in current account deficit D) tax cut will have no effect on GDP
The income-expenditure model focuses on changes in price levels
Indicate whether the statement is true or false