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Define intermediation.
The monetary system makes it possible for deficit and surplus economic units to come together exchanging funds for securities to their mutual benefit. When funds flow from excess economic units to a deficit economic unit to a financial institution the process is known as intermediation. The financial institution takes action as an intermediary between the two economic units.
How is present value affected by a change in the discount rate? Present value is inversely associated to the discount rate. In other words current value moves in the opposite
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