1. In what ways do savers benefit from the decisions of borrowers?
2. In what ways do borrowers benefit from the decisions of savers?
3. How might savers be harmed by borrowers?
4. How might borrowers be negatively affected by decisions made by savers?
A new bank, Second National, has come to town and to attract depositors, it is offering a 6.5% interest rate for savings accounts. (Community Bank currently offers an interest rate of 6%.) 5. What is the opportunity cost for depositors who stay with Community Bank?
6. What could Community Bank do to keep its depositors?
7.What effect could the higher rates at Second National have on the people who want to borrow at Community Bank?
2. In what ways do borrowers benefit from the decisions of savers?
3. How might savers be harmed by borrowers?
4. How might borrowers be negatively affected by decisions made by savers?
A new bank, Second National, has come to town and to attract depositors, it is offering a 6.5% interest rate for savings accounts. (Community Bank currently offers an interest rate of 6%.) 5. What is the opportunity cost for depositors who stay with Community Bank?
6. What could Community Bank do to keep its depositors?
7.What effect could the higher rates at Second National have on the people who want to borrow at Community Bank?