Central bank Essay Samples and Topic Ideas
central bank, in this case, the FED. The Federal Reserve is the economy's watchdog and interest rates are by far a key component of the economic well-being of a country. The interest rates can be controlled by the exercise of the following powers as charged by law, the power to control and change when the need arises the discounting factor, power to increase or decrease the interest and mandate all commercial institution to take up the new interest and open market operations where they sell government paper. The Federal Reserve tightens its monetary policies to ensure less economic liquidity thus increase the interest rates. And loosens the monetary policies and increase the money supply in an...
- Words: 1100
- Pages: 2
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central bank. This institution is charged with the responsibility of ensuring that the monetary state of the country is in order. Some of its function include the following; it is the lender of last resort for the banks in a country, the financial advisor to the government, discounting checks, the regulator of banks, distributes money in the economy, holding bank deposits and lending money to the government. With such a powerful reign over the economic and monetary institutions of a country, then the FED is by far an invaluable institution. During times of uncertainty in the economy, the FED takes measures to regulate and stabilize the systems to ensure that the economy is in a favorable state to...
- Words: 1100
- Pages: 4
central bank foreign reserves whereby there is the experience of drawing downs in the reserves, (Hasan, Hanaa, 108). Other implications include fuel shortages due to the minimal production. When there is a lack of fuel, much of the pinch goes to the industrial production whereby; the cost of production goes high; hence, the price of commodities get high to the detriment of the ordinary citizens, (Jiménez-Rodríguez, Rebeca & Marcelo, 21).The economy suffers inflation, and the chain continues until there is a replication of the primary cause of the stalemate. At some points, in the efforts of rescuing the economy of a country following stalemates such as those in Yemen and Syria, there are...
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Central Bank should be mandated to not only supervise the financial institutions but also to supervise and regulate the financial activities of the non-bank institutions that offer financial products to clients. Owing to this, it can access their financial information and advice them accordingly. Benefits of Adopting Euro to Counties in the Eastern Europe There are a number of benefits for countries that adopt Euro as their currency. First, this would be significant to small counties once they integrated their financial system to international financial market. Adopting the euro would strongly protect them against international financial turbulence. During financial disturbance countries with small...
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central banks as a regulatory mechanism in the process of controlling the economy. Simply put, these rates dictate the price of currency, and through policies from the central bank, economic stimulation can be possible, while also restraining the same is possible, this only happens when the expansion is rapid. Investors contend with the varied levels of interest rates to ensure investment in their different portfolios. With low-interest rates, central banks stimulate spending, and this applies when returns are low, leading to investments, because with low returns investors are always discouraged to save. This kind of spending leads to moderate inflation levels and increased growth in the economic...
- Words: 1100
- Pages: 4
central banks and fill a different form which will indicate the type of bond to be purchased, and the term, which is its maturity date. The investment is not risky, and with this condition, there will be lower return rates which will be paid on regularly as required. With a rate of 10%, the investment will surely bring high profits of $100000, and this is a sure way of getting money annually and semiannually as might be decided. The other amount of $1000000 will always remain intact and only payable at the end of the term. Through this arrangement, the investor will live off the profits that given periodically and later use the capital on other investments when the tenor of the bond expires. Below is...