UNIVERSITY OF HARGEISA

School of Economic
Faculty of Islamic Bank

Name: Shukria Hussein Abdi Awad

ID: 1818720
a) Real gross domestic product real GDP for short is a micro economic measure of value of
economic out adjusted for price changes (i.e. inflation or deflation) this adjust transforms the
money value measure nominal GDP into an index for quantity of total output.

b) In economic inflation is a suction increase in the general price level of goods and services in
a economy over a period of time. When the general price level vises, each unit of currency buys
fewer goods and services.

c) The interest rate is the amount a lender charges for the use of asset expressed as a percentage
of the principle. The interest rate is typically noted on an annual bisis know as the annual
percentage rate (APR). The assets borrowed could include cash consumer goods are large assets
such as or building.

2) Financial markets help to efficiently direct the flow of savings and investment in the
economy in ways that facilities the accumulation of capital and the production of goods and
services daily transactions in the financial markets both the money (short term, a year or less)
and capital over year markets are huge.

3) the lower price for affirms shares means that’s it can raise asmaller amount of funds , and so
in restment in plant and erumpent will fall.

4. the basic activity of banks is to accept deposits and make. Loans.

5. the statement is true financial intermediaries acts link between investor and company funds.

6. the primary reason why people give their money to financial intermediaries instead of
lending or investing the money directly is because of the risk the is prevent from the
information asymmetry. Between the prdiver of funds and the voiceover of those funds.

7. Revisions in the short run tend to cancel each out. Meaning long. Run verisions are small.

8. if their is sideline ante vest rates. You would rather beholding long term bonds because
theirs price. Would increase more than the price of short term bonds giving them higher
return. Interest rate risk.
9. the liquidity prefence from work when the economy booms. The demand. For money
increase people need more money to carry out an increase amount. of transactions and also
because their wealth has risen the demand curve thus shifts to the right using the equipriam
intrestes rate. The opposite is true at the time of recession.

10. An increase in money supply results in a decrease in the money supply causes avise
inflation as inflation rise the purchase power or the value of money decrease. It there will cost
more to buy the same quantity of goods or services.