NAME : Kobe Ryan N.

Cabahug
YEAR and SECTION : BSMT II-B
Directions: Answer the questions comprehensively.
Grading System: The criterion for grading is embedded on the next page.
1. Why do countries trade? (15pts)
- A country can’t always produce the good or possess the natural resources it needs. In
order to gain those things, countries establish trade relationship so country that produce a
surplus of certain goods can sell it to another country in need. Trade between countries had
existed since thousands of years ago and it becomes more important today.

Trade empowers people to buy goods and services that are not produced in their countries.
In addition, revenues from the export of goods and services help determine the amount that
can be spent on imports, as well as the amount of foreign credit that countries can afford.
Trades can stimulate a country's development and economic growth. It helps create new
jobs, improve living standards and empowers people to manage their lives. International
trades without barriers in the form of tariffs, quotas and government subsidies can benefit
people in all countries, developed and developing alike.

As consumers, people are given the opportunity to choose goods of a wider range, higher
quality and lower cost.

As sellers, people are able to sell their products in more markets

2. Give the importance of financial institutions in the economy. (15pts)

- The financial system comprises many different types of financial institutions (banks,
insurance companies, mutual funds, finance companies, investment banks). All of these
institutions are heavily regulated by the government. Financial Intermediaries are institutions
that borrow from savers and lend to those who need funds.

Banks accept deposits and make loans. Banks include commercial banks, savings and loan
associations, mutual savings banks, and credit unions. People who want to borrow money
usually go to their local banks.

Most people keep a sizeable portion of their wealth in banks in checking accounts, savings
accounts, and other types of bank deposits. Banks are the largest financial intermediaries in
the economy.

The impact of Financial Institutions on economy:

1. They control how much they lend and how they lend.
2. Some control the interest rates (the federal reserve).
3. Some help investors save for their futures with their own mutual funds which
invest on a set of criteria.
4. They make loans to businesses.
Your essay will be graded based on this rubric. Consequently, use this rubric as a guide when writing your essay and check it again before submitting.
Criteria 5 4
There is one clear, well
focused topic. Main ideas
Focus and Detail are clear and are well
supported by detailed and
accurate information.
The introduction is inviting,
states the main topic, and
provides an overview of the
Organization paper.
Information is relevant and
presented in a logical order.
The conclusion is strong.
Word Choice The author uses vivid words
and phrases. The choice and
placement of words seems
accurate, natural, and not
forced.
All sentences are well
constructed and have varied
structure and length.
Sentence Structure,
The author makes no errors
Grammar, Mechanics, & in grammar, mechanics,
Spelling and/or spelling.
There is one clear, well
focused topic. Main ideas are
clear but are not well
supported by detailed
information.
The introduction states the
main topic and provides an
overview of the paper. A
conclusion is included.
The author uses vivid words
and phrases. The choice and
placement of words is
inaccurate at times and/or
seems overdone.
Most sentences are well
constructed and have varied
structure and length.
The author makes a few
errors in grammar,
mechanics, and/or spelling,
but they do not interfere with
understanding.
3 2
There is one topic. Main The topic and main ideas are
ideas are somewhat clear. not clear.
The introduction states the There is no clear introduction,
main topic. A conclusion is structure, or conclusion.
included.
The author uses words that The writer uses a limited
communicate clearly, but the vocabulary. Jargon or clichés
writing lacks variety. may be present and detract
from the meaning.
Most sentences are well Sentences sound awkward,
constructed, but they have a are distractingly repetitive, or
similar structure and/or are difficult to understand.
length.
The author makes numerous
The author makes several errors in grammar,
errors in grammar, mechanics, and/or spelling
mechanics, and/or spelling that interfere with
that interfere with understanding.
understanding