The Role of Central Bank Bank of Thailand (Central Bank of Thailand) The Bank of Thailand Act was promulgated on April 28‚ 1942 conferring the status of a juridical person on the Bank of Thailand and allowing it to carry out all central banking functions. The Bank of Thailand started operations on December 10‚ 1942. As per the Bank of Thailand Act‚ 1942‚ the Minister of Finance is charged with powers to look after the overall functions of the bank. The main objective of the bank is to maintain
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1. Inflation is a global Phenomenon which is associated with high price causes decline in the value for money. It exists when the amount of money in the country is in excess of the physical volume of goods and services. Explain the reasons for this monetary phenomenon. Ans: Inflation: In economics‚ inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. It can be defined as too much money chasing too few goods. When the general price
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because they misapply or misinterpret DCF techniques. It has been asserted by several writers that firms are guilty of rejecting worthwhile investments because of the improper treatment of inflation in the financial appraisal. Many firms are understating NPVs and IRRs because of the incorrect treatment of inflation and the use of excessively high discount rates. Concern has also been expressed by various commentators that many companies are failing to invest in advanced manufacturing technologies (AMT)
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Chapter 1 Introduction to Capital Market 1. Capital Market Capital markets are financial markets for the buying and selling of long-term debt- or equity-backed securities over one year is traded. Security includes- shares‚ debentures‚ bonds etc. A key division within the capital markets is between the primary markets and secondary markets. In primary markets‚ new stock or bond issues are sold to investors‚ often via a mechanism known as underwriting. The main entities seeking to raise
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macroeconomics factors such as GDP‚ unemployment‚ inflation‚ and interest rates can become very complex indeed. This paper will discuss monetary policy and its effect on macroeconomic factors such as GDP‚ unemployment‚ inflation‚ and interest rates. The paper will also explain how money is created. Ultimately‚ the goal of this paper is to which combination of monetary policy will help best achieve a balance between economic growth‚ low inflation‚ and a reasonable rate of unemployment. Monetary policy
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Clearly label your answers. 1. What impact will an unanticipated increase in the money supply have on the real interest rate‚ real output‚ and employment in the short run? How will expansionary monetary policy affect these factors in the long run? Explain. An unanticipated increase in the money supply will have a significant negative or positive impact on different areas of the economy. Real interest rate will decrease in the short run when money supply increases. When money demand fluctuates‚ it
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Differentiate between Rational and Adaptive Expectations and clearly explain their role in focusing on future macro-economic variables 1. Rational Expectations The theory of rational expectations was first proposed by John F. Muth of Indiana University in the early 1960s. He used the term to describe the many economic situations in which the outcome depends partly on what people expect to happen. Rational expectations theory is an assumption in a model that the agent under study uses a forecasting
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CURRENT ECONOMIC SITUATION 1 The Current Macroeconomic Situation Crystal Loveday Devry University ECON 312: Principles of Economics Summer B‚ 2011 CURRENT ECONOMIC SITUATION 2 Introduction The current macroeconomic situation in the United States of America according to the article Economy in the United States that it is the world’s largest national economy‚ but has been going
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consumer price index (CPI). • The CPI is used to monitor changes in the cost of living over time. When the CPI rises‚ the typical family has to spend more to maintain the same standard of living. • Inflation describes a situation in which the economy’s overall price level is rising. Economists measure the inflation rate by the consumer price index THE CONSUMER PRICE INDEX • The CPI is a measure of the overall cost of the goods and services bought by a typical consumer. • The first step in computing the
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Y C. MV = PY D. MP = VY 5. Using the equation of exchange‚ if inflation is 1.5%‚ real output grows by 3.0%‚ and the growth rate of money is 5.0%‚ the change in the velocity of money is: A. Zero; velocity is constant B. -0.5% C. +4.5% D. +0.5% 6. Using the equation of exchange‚ if real GDP increases by 3.0%‚ the velocity of money grows by 1.0% and the growth rate of money is 3.0%; what is the rate of inflation? A. +1.0% B. It is constant or a 0% change C. It is the same as the
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