Each question is required to have organized and well thought out responses in Es

Question

Each question is required to have organized and well thought out responses in Essay format with a minimum of 2 paragraphs.

5- What role does the Federal Reserve play as a financial institution in the overall economic and financial well being of the U.S.?

6- What would happen to the U.S. standard of living if people lost faith in the safety of the financial institutions? Explain.

7- How do airlines benefit from acquisitions of other airlines? How does it affect the market? How does it affect the consumer? How does it affect the share holders?

8- What is the function of Financial Statements? Who is interested in Financial Statements?

9- There are Four Key Financial Statements:
Income Statement (also known as Profit / Loss, or Statement of Operations)
Balance Sheet
Cash Flow Statement
Stockholders' Equity Statement

10- Please describe what each statements details.

“Cash is King” and operating cash flow is the lifeblood of a company and the most important barometer for investors.

A company that does not generate cash over the long term is on its way out. Which 3 Strategies to increase cash flow do airlines utilize?

11-Explain the aspects of financial diversification and why Companies use financial diversification to limit business risk. Is financial diversification the only cure-all for the disease known as business risk?

Explanation / Answer

5- What role does the Federal Reserve play as a financial institution in the overall economic and financial well being of the U.S.?

The federal reserve is the central bank of USA. The Federal reserve has three functions which are-

Conducting the nation's monetary policy by influencing interest rate, money and credit conditions in the economy in order to ensure stable prices.

2. maintaining an effective and efficient payments system

3. regulating banking operations and othe financial institutions.

4. Maintaining inflation

By using expansionary and contractionary monetary policy , It triggers inflation. It raises interest rates that make borrowing expensive, which slow down growth.

5. Ensurting consumer protection

6. bankers' bank

That is because each Reserve bank stores currency, processes checks and, most importantly, makes loans for its members to make their reserve requirement when needed.

Fed works as every other central banks of other countries. It stabilises the inflation, currency circulation, maintains liquidity, and also protects the interest of the consumer .Thus it plays a very important role for overall economic and financial well being of the USA.

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