Razel Ann Galit Mrs.

Aurora Susan Reyes

BSBA FM2 – G2 Banking and Financial Institutions

REVIEW QUESTIONS

1. Why is there a need to understand how monetary policy is conducted by central banks
worldwide?

It is critical to understand how central banks around the world conduct monetary policy since it is critical
to achieving price stability and managing economic swings. The policy frameworks within which central
banks operate have undergone significant modifications in recent years. Influences the rate of
economic growth and the value of the currency indirectly. As a result, as a citizen of the nation or state,
it is critical to be aware of and comprehend the policy because we are directly affected by it.

2. What crucial role do banks and other financial institutions play?

Financial institutions are vital organizations that play a crucial role in the economy. Commercial banks,
savings and credit societies, and investment institutions are examples of such institutions, and they all
work together to help individuals, corporations, and other organizations manage their finances
appropriately. Individuals and business enterprises may not have the capacity to finance business
expansion or to start new ventures, so financial institutions offer cash advances to their members; and,
offering investments.

3. Why is understanding how financial institutions are managed important to your life?

Financial markets and institutions not only have an impact on my daily life, but they also entail a massive
movement of capital throughout the global economy. The study of financial markets and institutions
will provide me with a grasp of many fascinating subjects, such as how funds are shifted from people
who have an excess of available cash to people who have a scarcity. And how well-functioning financial
markets are a vital role in achieving high economic growth, and how poorly performing financial markets
are one reason why many countries around the world stay desperately poor.

4. Give three important reasons why is there a need to study Financial Markets.

Financial markets are markets in which monies are transferred from those who have an excess of
accessible funds to people who have a lack. Financial market activity produces improved economic
efficiency direct consequences on personal wealth, business and customer behavior, and the cyclical
performance of the economy.

5. What is the most significant role that financial markets play?

The most important role that financial markets play is that they have an impact on people's daily lives
and also involve significant flows of money throughout the global economy, which in turn affect
business profits, the production of goods and services, and the economic well-being of nations around
the world. Furthermore, it eliminates the financial gap between those who have an abundance of
money and those who need it.
6. Explain briefly the three levels of the framework that underlie the study of financial markets and
institutions.

The three levels of the framework

a. Understanding - Students learn to become aware in the economy and learn to understand
economic analysis.

b. Evaluating - Students learn to become aware in the economy and learn to understand economic
analysis.

c. Predicting - Students learn to become aware in the economy and learn to understand economic
analysis.