Define the loanable funds market and the production possibilities frontier as discussed today in class. What happens to each if (for instance) an economy is characterized with many productive baby boomers entering retirement?

Why do financial markets exist? What are financial instruments? Explain financial markets role in providing risk sharing, liquidity, and increases in information. Why are risk sharing, liquidity, and information valued by savers and borrowers?

Do banks and other financial intermediaries like high interest rates? Why or why not?

Differentiate between the primary and secondary, money and capital, and cash and derivative ways to analyze financial markets. What goods are associated with each?