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!
Discount Rate (Bank Rate)
This is the rate on central bank advances and is also called official discount rate or "minimum lending rate". When commercial banks find themselves short of cash they may, instead of contracting bank deposits, go to the central bank, which can make additional cash available in its capacity as "lender of last resort", to help the banks out of their difficulties. The Central Bank can make cash available on a short-term basis in either of two ways; by lending cash directly, charging a rate of interest which is referred to as the official "discount rate", or by buying approved short-term securities from the commercial banks. The central bank exercises regulatory powers as a lender of last resort by making this help both more expensive to get and more difficult to get. It can do the former by charging a very high "penal" rate of interest, well above other short-term rates ruling in the money market. Similarly, when it makes cash available by buying approved short-term securities, it can charge a high effective rate of interest by buying them at low prices. The effective rate of interest charged when central bank buys securities (supplying cash) is in fact a re-discount rate, since the bank is buying securities which are already on the market but at a discount.
The significance of this rate of interest charged by the central bank in one way or the other to commercial banks, as a lender of last resort, is that if this rate goes up the commercial banks, who find that their costs of borrowing have increased, are likely to raise the rates of interest on their lending to businessman and other borrowers. Other interest rates such as those charged by building societies on house mortgages, are then also likely to be pulled up.
Discuss whether Indian Consumer goods industry is growing at the cost of future Profitability.
What is an effective need of demand 1. An Effective Need: Effective need demands that there must be a need supported by the capacity and readiness to shell out. Henceforth there
What is Managerial economics according to McGutgan and Moye McGutgan and Moyer: "Managerial economics is the application of economic theory and methodology to decision-making
Explain the Decision-making theory Decision-making theory and game theory that recognise the conditions of imperfect knowledge and uncertainty under which business managers ope
Suppose that there is a fixed sum of money available to be spent on public projects, and that a large number of public projects have been evaluated using social cost-benefit analys
AGGREGATE DEMAND This refers to the total planned or desired spending in the economy as a whole in a given period. It is made up of consumption demand by individuals, planned
Resource allocation in a free enterprise Although there are no central committees organising the allocation of resources, there is supposed to be no chaos but order. The major
PHILLIPS CURVE The Phillips curve, named after A. W. Phillips, describes the relationship between unemployment and inflation. In 1958 Phillips, then professor a
SHORT-RUN EQUILIBRIUM All firms are assumed to aim at maximizing profits or minimizing losses. The monopolist controls his output or price, but not both. The monopoly maxi
Describe and answer in economic terms a managerial decision you have knowledge about (for example one that has to be made at your place of employment). Some examples of decisions a
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