List and explain the main factors that affect the amount of savings in an economy. E.g., does aging impact on the propensity to save and hence on interest rates? Explain why and illustrate your answer.
Question 2: (no more than 1,000 words is required) These are all examples of financial exclusion – explain their impact on the economy in turn.
§ Small firms are unable to raise finance for investment.
§ Significant numbers of people have no bank account.
§ Some people can only borrow at extremely high interest rates.
§ Firms are unable to pay the full pensions of their employees and ex employees.
§ The importance of financial markets and institutions are not sufficiently taken into account in government legislation.
Question 3
a) Why might firms issue equity rather debt or vice versa when raising finance? Give advantages and disadvantages of each and choose one option you prefer.

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