Answered: Do we really need a Central Bank in our…

Business

Operations Management

Do we really need a Central Bank in our Country?

Foundations of Business (MindTap Course List)

6th Edition

ISBN:9781337386920

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter1: Exploring The World Of Business And Economics

Section1.5: The Business Cycle

Problem 3CC

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Concept explainers

Monetary Policy

Monetary policy means the process through which a central bank or other financial authorities manage the money supply in an economy. It is an attempt to reduce inflation and contributes to the stable gross domestic product (GDP) to lower unemployment. The monetary authority reduces the interest rate for price stability in a nation’s currency. The central bank of a nation governs monetary policies and controls the overall money supply available to banks and customers.

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Do we really need a Central Bank in our Country?

If they are so important to the fiscal and monetary objective of any country, why have their roles as a financial watchdog as it relates to several economic crisis, open more suspicion. In fact they seem most of the times totally unprepared to deal with the pending economic fallout? Many will argue as well that the CB seem to be more reactive rather than proactive. Critically discuss.

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Instructions: The Financial Services Commission has invited you to publish an article in their Business Magazine. The topic is The Role of Money in Society. They have given you the following pointers to aid in the development of your article: 1. Trace the development of money a. barter b. commodity c. fiat money 2. Explain the role of money in society 3. Differentiate between the characteristics and the functions of money 4. Explain the different forms of money in today's world a. commodity b. near money c. fiat money d. token money e. broad money f. money substitutes g. ml, m2, m3 and m4
1 Examine the causes of the Asian Financial Crisis in 1997 and analyse the impacts on one of these countries which have been badly affected.
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Explain the differences between the International Monetary System and the International Monetary Fund. What are the three major types of crises most frequently addressed by the International Monetary Fund?
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In this "The General Theory of Employment, Interest and Money, 1936". John Maynard Keynes stated that " When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done." Do you agree with Keynes statament the market failure is inevitable in financial markets? Justify your answer with the reference to economic theory and evidence.
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