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Aryan · 2024-11-21T01:41:20.086Z

#economics #banks #centralbank • Bartering -: The term bartering talks about a exchange of good or service for an another good or service • Bartering is considered as a inefficient method of trading as below : • Some of the goods are hard to carry thus some trades are not possible • There is no proper value in barter system it all depends upon the want of a person • Some of the value in barter system is inefficient, suppose 1 sheep is worth 1/4 of a chicken, this trade is not possible • Need enough area for storage Central Bank • The central bank of a country is the monetary authority that oversees and manages the national money supply and banking system • Example -: European Central Bank Monetary Authority And Monetary Policies • Monetary Authority is a institution that manages the money, banking system and monetary policies of a national country or a union • Example Of Monetary Authority -: RBI - ( Reserve Bank Of India ) • Monetary Policies -: it is a tool used by central banks to manage the money and stabilize output • Function Of Monetary Policies -: Monetary policies are basically types of rules that central bank uses to handle the national economy and stabilize output and money Functions Of Central Bank • Solo Issuer Of Bank Notes And Coins -: The central bank has sole rights to issue legal tender in the nation, it has the authority to print banknotes and mint coins • The Governments Bank -: The central bank acts as a governments bank as the government manages the accounts of customers, the central bank is responsible for the deposits and accounts of government, hence it acts like a governments bank, it makes short-term loans and long-term loans for the government • The Bankers Bank -: The central bank acts as a bank for the other banks, the banks in the country have their accounts in the central bank, central bank handles the accounts of every banks in the country • The Lender Of Last Resort -: Through rules the commercial banks are supposed to store a certain percentage of money for the use of nation crisis and development

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Aryan

Nov 21

The Functions Of Central Bank

in Aryan

#economics #banks #centralbank

Bartering -: The term bartering talks about a exchange of good or service for an another good or service
Bartering is considered as a inefficient method of trading as below :
- Some of the goods are hard to carry thus some trades are not possible
- There is no proper value in barter system it all depends upon the want of a person
- Some of the value in barter system is inefficient, suppose 1 sheep is worth 1/4 of a chicken, this trade is not possible
- Need enough area for storage

Central Bank

The central bank of a country is the monetary authority that oversees and manages the national money supply and banking system
Example -: European Central Bank

Monetary Authority And Monetary Policies

Monetary Authority is a institution that manages the money, banking system and monetary policies of a national country or a union
Example Of Monetary Authority -: RBI - ( Reserve Bank Of India )
Monetary Policies -: it is a tool used by central banks to manage the money and stabilize output
Function Of Monetary Policies -: Monetary policies are basically types of rules that central bank uses to handle the national economy and stabilize output and money

Functions Of Central Bank

Solo Issuer Of Bank Notes And Coins -: The central bank has sole rights to issue legal tender in the nation, it has the authority to print banknotes and mint coins
The Governments Bank -: The central bank acts as a governments bank as the government manages the accounts of customers, the central bank is responsible for the deposits and accounts of government, hence it acts like a governments bank, it makes short-term loans and long-term loans for the government
The Bankers Bank -: The central bank acts as a bank for the other banks, the banks in the country have their accounts in the central bank, central bank handles the accounts of every banks in the country
The Lender Of Last Resort -: Through rules the commercial banks are supposed to store a certain percentage of money for the use of nation crisis and development

2 comments

Comments (2)

indu marath

Nov 25

What role does a central bank play in regulating and supervising commercial banks?
How does the central bank manage the country's foreign exchange reserves?
What is the significance of the central bank's interest rate decisions on the economy?
How does the central bank act as a lender of last resort during financial crises?
What are the tools used by central banks to influence money supply and credit conditions?
How do central banks ensure the stability and integrity of the financial system?
What is the relationship between the central bank and the government in terms of fiscal policy?

Aryan

Nov 28

Replying to

The central bank ensures banks operate safely by setting rules, monitoring compliance, and intervening when needed to protect the financial system.
It manages reserves to stabilize the currency, support trade, and maintain confidence in the economy by buying/selling foreign currencies.
Interest rates influence borrowing, spending, and inflation. Lower rates boost economic activity; higher
The central bank provides emergency funding to banks facing liquidity shortages to prevent financial system collapse.
The central bank influences money supply and credit using tools like adjusting interest rates, controlling bank reserves, and buying or selling government securities.
The central bank promotes stability through regulation, oversight, crisis management, and maintaining public confidence in the financial system.
The central bank works independently but coordinates with the government to align monetary policy with fiscal goals, like managing inflation and debt.