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.
Arguments against protectionism Most of the arguments for protectionism may be met with counter arguments, but underlying the economic arguments as opposed to the social, mo
Importance of Income Elasticity If a country is experiencing economic growth, the income of the people will increase. However, for those engaged in the production of goods wi
what is the role of managerial economics in running a business?
discuss the validity in zimbabwe of the grounds on which the profit maximising model of the firm has been defended
Q. Explain about Concave Isoquant? If the isoquant is concave to origin it would mean that marginal rate of technical substitution is increasing. This behaviour is explained in
A MATHEMATICAL APPROACH TO REVENUE AND COST FUNCTIONS Recall that TR = P x Q This implies that P(AR) = TR Q For example, assuming
Describe the Status goods of law of demand The law doesn't concern the commodities that function as a 'status symbol', add to the social status or exhibit prosperity and opulen
Define the Managerial economics Managerial economics is thus a study of application of managerial skills in economics. It assists in determining, anticipating and resolving po
Indifference curves In order to explain indifference curves, we will again make the simplifying assumption that the consumer buys two goods, x and y. The table below gives
Market Structures This refers to the nature and degree of competition within a particular market. Capitalist economies are characterised by a large range of different market
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