page QUESTION 1 (a) Lenders and borrowers are seldom able to do a direct deal because of a clash of interests. How do financial intermediaries meet the needs of both lenders and borrowers? (4) Explain the following quote: “Banks are unique because they can create money out of thin air.” (4) Explain how the Banks Act 94 of 1990 regulates banks as far as risk management and balance sheet requirements are concerned. (6) (d) Describe how accommodation policy is applied by the SARB. (6) (d)
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INTRODUCTION There are a variety of factors that impact the shape of the yield curve but monetary authorities influence greatly the shape of the yield curve .Monetary authorities influence the shape of the yield curve by initiating either a contractionary monetary policy or an expansionary monetary policy.A yield curve is a line that plots the interest rates‚ at a set point in time‚ of bonds having equal credit quality‚ but differing maturity dates. The most frequently reported yield curve compares
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price instability (inflation and deflation) including definitions of these and related concepts The price level and how it is computed Measures of the price level in practice (the CPI‚ the GDP Deflator etc.) Computation of inflation (and deflation) rates and interpretations of these Hyperinflation and disinflation The Quantity Theory of Money (and the dynamic form of this expression) The Monetarist position on the relationship between money and inflation The Keynesian/ New
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borrow funds. a. Explain the supply curve for the loanable funds market. Why the supply curve for loanable funds is upward sloping? b. Explain the demand curve for the loanable funds market. Why the demand curve for loanable funds is downward sloping? c. How the real interest rate adjusts to balance the supply of and demand for loanable funds (adjustment process). 3. Using separate diagrams for market for loanable funds (closed economy) explain and illustrate the impact
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FIN340 304 Tutorial week 3 Questions 1. How can a central bank use direct intervention to change the value of a currency? Explain why a central bank may desire to smooth exchange rate movements of its currency.. 2. Should the governments of Asian countries allow their currencies to float freely? What would be the advantages of letting their currencies float freely? What would be the disadvantages? 3. What is the impact of a weak home currency on the home economy‚ other things
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CHAPTER 1 QUESTION: IDENTIFY AND EXPLAIN TEN (10) MACROECONOMIC VARIABLES AFFECTING A NAMED BUSINESS ENVIRONMENT. HOW CAN THESE BE REGULATED? INTRODUCTION In today’s world‚ no business operates in isolation without interacting with the environment where it operates. Irrespective of the nature of business whether public or private organization; manufacturing; service industry; local or international firm‚ its operations are inhibited by the environment in which it operates. During 2003-2007
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inherently unstable. The theory implies that some form of government intervention is required to alter macro-economic outcomes. With regards to the above theory‚ discuss the stage of the business cycle that your country is currently experiencing and explain how government intervention has either helped or hindered economic growth in the past. QUESTION THREE ceiling for maize at USD280.00 per ton for the 2010/2011 marketing season. With reference to the scenario above‚ discuss with the aid of diagrams
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The Economics of Business and Management Assignment No. 3 & 4 Q1 Draw and label the circular flow model and use it to answer the following: [pic] The circular flow can be explained very easily with a simple formula. GDP (gross domestic product) = C + I + G + X – Z= = C + S +T – B In here C is the consumption‚ I is investments‚ G – government spending‚ S – savings. On the other hand X is export‚ Z is imports T is for taxes and B is the benefits. The circulars flow shows the
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contents A key challenge that businesses face is scarcity. Explain how the production possibility curve/frontier (PPF) can be used to analyze the fundamental economic challenges (Viz. scarcity‚ choice and opportunity cost). Choose two products (and with the aid of graphs) that a business may be producing/manufacturing as the basis for your discussion and suggest ways in which the business may redefine their PPF. 3 2. Question Two. 7 Recently inflation targeting‚ a policy that has been used by the South
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1. How can the adverse selection problem explain why you are more likely to make a loan to a family member than to a stranger? Because you know your family member better than a stranger‚ you know more about the borrower’s honesty‚ propensity for risk taking‚ and other traits. There is less asymmetric information than with a stranger and less likelihood of an adverse selection problem‚ with the result that you are more likely to lend to the family member. 2. If mortgage rates rise from 5%
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