Business Finance and Investment: Activity 2

Name: PADREQUILAGA, PRINCESS MAE A.

What I Have Learned

Instruction: Think and answer the question below.

What would happen to a country’s standard of living if people lost faith in the safety of
the financial institutions?  Explain.

It would be difficult for businesses to raise cash if people lost faith in the safety of
financial institutions in a given country. As a result, capital investment would
stagnate, unemployment would rise, products and service output would fall, and our
standard of life would deteriorate. However, the primary function of financial sector
development in growth is projected to change away from mobilizing funds and so
increasing investment quantity and toward enhancing investment efficiency and
thereby contributing to improved overall productivity.