Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Open Market Operations
The Central Bank holds government securities. It can sell some of these, or buy more, on the open market, buying or selling through a stock exchange or money market. When the bank sells securities to be bought by members of the public, the buyers will pay by writing cheques on their accounts with commercial banks. This means a cash drain for these banks to the central bank, represented by a fall in the item "bankers" deposits' at the central bank, which forms part of the commercial banks' reserve assets. Since the banks maintain a fixed liquidity (or cash) ratio, the loss of these reserves will bring about multiple contraction of bank loans and deposits.
By going into the market as a buyer of securities, the central bank can reverse the process, increasing the liquidity of commercial banks, causing them to expand bank credit, always assuming a ready supply of credit-worthy borrowers.
Conversely, if the central bank wanted to pursue an expansionary monetary policy by making more credit available to the public, it would buy bonds from the public. It would pay sellers by cheques drawn on itself, the sellers would then deposit these with commercial banks, who would deposit them again with the central bank. This increase in cash and reserve assets would permit them to carry out a multiple expansion of bank deposits, increasing advances and the money supply together.
Q. Show the Characteristics of monopoly? Let's summarise the main characteristics of monopoly as under: Cross-elasticity of demand for a monopoly product is zero in the
The significance of behavioural approach is difficult to assess. It provides useful insights into some aspects of business behaviour. March and Cyert have claimed considerable shor
Q. Show the Empirical analysis? Empirical analysis aimed at investigating nature of scale economies, degree of input complementarily orsubstitutability, or the nature and exten
Write on one theory of profit. Profit as rent of ability: one of the most widely known theories of profit was propounded by F.A. Walker. According to him profit is the rent of is t
in the context of an environment of business,state briefly the implication of (1) Ee>1.....(2)Ee=1......(3)Ee=0.......(4)Ee
encrimetal concepts
LONG RUN EQUILIBRIUM FOR THE FIRM Since there is freedom of entry into the industry the surplus profits will attract new firms into the industry. As a result the supply of th
Internal and External factors of business operation External factors : A firm can't exercise any control over these factors. Thepolicies, plans and programmes of the firm m
A monopolist faces a straight line demand curve which passes through the point Rs 10 per ton on the price-cost axis and through the point 8000 tons on the quantity axis. The fir
discuss the significance of managerial economics in regards to business strategies employed by business entities currently operating in the global economy
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd