Question

If more Canadians adopted a “live for today” approach to life, how would this affect saving, investment, and the interest rate?

What is the role of the financial system? Name and describe two markets that are part of the financial system in our economy. Name and describe two financial intermediaries.

Answer 1

ANSWER
Qa. If more canadians adopted a "live for today"approach to life then they would spend more and save less . there would be less saving and investement and a higher interest rate. This would also shift the supply curve to the left in market for lonable funds.

Qb. The role of financial system is to help match one person's saving with another person's investement.

Two markets that are part of financial system
* The bond market , through which large corportations, the federal government .
* Local governments borrow , and the stock markets , through which corporations sell ownership shares.

Two financial intermediaries: financial institutions through which savers can indirectly provide funds to borrowers
*Banks , which take in deposits and use the deposits to make loans.
* Mutual funds , which sell shares to the public and use the proceeds to buy a portfolio of finanacial assets.