Earlier this year, the South African Reserve Bank raised its interest rate to a 14-year high, a move Governor Lesetja Kganyago described as "bitter medicine" needed to tame inflation”. What is the primary function of the South African Reserve Bank (SARB) being demonstrated in this case? A. Regulation of the stock market B. Conducting of monetary policy and ensuring price stability C. Management of the country's foreign affairs D. Overseeing of the national healthcare system
Monetary Policy and Equation of Exchange
The monetary policy has been defined as the policy that is used by the Federal Reserve (the central bank of the US) or the central bank (the central bank of India is RBI) along with the use of the supply of money to accomplish certain macroeconomic policies. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.
Monetary Economics
As from the name, it is very evident that monetary economics deals with the monetary theory of economics. Therefore, we can say that monetary economics, is that part of economics that provides us with the idea or notion of analyzing money as a holding with its function, which acts as the medium of exchange, the store of value through which the buying and selling are done and also the unit of account. It also helps in formulating the framework of the monetary policy of a bank in an economy which ultimately results in the welfare of the people residing in that particular economy. The monetary policy of an economy also helps to analyze and evaluate the financial health of it.
“Earlier this year, the South African Reserve Bank raised its interest rate to a 14-year high, a move Governor Lesetja Kganyago described as "bitter medicine" needed to tame inflation”.
What is the primary function of the South African Reserve Bank (SARB) being demonstrated in this case?
A. Regulation of the stock market
B. Conducting of
C. Management of the country's foreign affairs
D. Overseeing of the national healthcare system
Which of the following measures may assist the SARB in decreasing the money supply in the economy to
“tame inflation”?
A. An increase in the currency held by the public
B. An increase in government spending
C. A decrease in interest rates
D. An increase in bank lending
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