About This Chapter
The Flow of Funds in Financial Intermediaries - Chapter Summary
If you need to refresh your understanding of financial intermediaries and the flow of funds, look no further than this series of engaging finance lessons. As you work through the chapter, you'll define and solidify your understanding of several topics related to financial intermediaries, including adverse selection, discount rates, bank lending, financing, bank assets and more. You can take the accompanying lesson quizzes and print out lesson transcripts to supplement your studying experience. By the end of the chapter, you should be able to:
- Describe the flow of funds in intermediaries
- Compare several types of financial assets, bank assets, liabilities and financing
- Understand how the money supply is measured
- Evaluate bank lending in the economy
- Explain monetary policy and discount rates
- Identify the 5 Cs of credit
- Define demand deposit and adverse selection
1. What Are Assets? - Definition & Examples
In this lesson, you will learn about assets, the first variable of the basic accounting equation. We will discuss the definition, categories, and classifications of assets.
2. Types of Financial Assets: Money, Stocks & Bonds
For an economy to operate effectively, consumers and businesses need a common medium of exchange and mechanisms to encourage some people to save, others to borrow and others to invest. In any modern economy, these needs are met with money, stocks and bonds.
3. Bank Assets & Liabilities: Definitions & Examples
In this lesson, you'll learn about the different types of bank assets and liabilities. We'll look at examples of bank assets and liabilities including a discussion of rate sensitive assets and liabilities.
4. Measuring the Money Supply: Explanation and Examples
Discover how the Federal Reserve defines the money supply by exploring the components of the money stock. In this lesson, we also look at the money supply in terms of function and liquidity.
5. How Money Is Made: Understanding Bank Lending in the Economy
In this lesson, you'll learn how a single deposit in a local bank increases the money supply and filters through the economy with the help of the fractional reserve banking system.
6. The Discount Rate & Monetary Policy: How Banks Can Borrow Money from the Federal Reserve
Learn more about the discount rate, which is the rate that banks pay to the central bank when borrowing money. This lesson explains how changes in the discount rate affect the money supply and how the central bank can use the discount rate as part of monetary policy.
7. The 5 C's of Credit
What's your creditworthiness? When a business owner needs a loan from the bank or financial institution, they will go through an evaluation process to determine their eligibility. Business owners need to consider what financial institutes look at. In this lesson you will learn about the process known as the 5 C's of credit.
8. What Is Financing? - Definition & Types
People borrow money to purchase homes, cars, boats, or anything else they don't have the money for at the moment they want to make the purchase. In this lesson, learn what financing is, as well as different types of financing used every day.
9. Demand Deposit: Definition & Overview
Most people with bank accounts have demand deposits even if they don't know it. In this lesson, you'll learn what a demand deposit is and some related concepts. You'll also have a chance to take a short quiz after the lesson.
10. Adverse Selection in Economics: Definition & Examples
In this lesson we will look at adverse selection in economics. We will define the term and look at how asymmetric information is related to adverse selection. An example will be provided, followed by a summary and a quiz.
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Other chapters within the TECEP Financial Institutions & Markets: Practice & Test Prep course
- Financial Markets & Financial Instruments
- Interest Rates Overview
- Financial Market Analysis & Trading
- Banks & Other Financial Intermediaries
- Regulation of Financial Institutions
- Introduction to International Finance
- Introduction to the Mortgage Market
- Futures & Options
- Branch Banking & Deposit Insurance
- Money & Interest-Rate Relationships
- Inflation & Income Policies
- TECEP Financial Institutions & Markets Flashcards