Chapter 19, Problem 4Q

To determine

Whether the primary objective of the Central Bank should be the stability of financial markets

Concept Introduction:

Financial Markets: It is a marketplace for the trading of various financial instruments such as securities and bonds as well as currencies and commodities where the prices are determined through demand and supply of the commodities and instruments traded.

Financial crisis: It is a situation of economic difficulty wherein the securities and other commodities traded in the financial markets start losing a major part of their nominal value and the money supply is outpaced by the demand of money