Imports and export facility: The policies particularly focus on empowering exchanges and trade as imports and fares between the nations all the more successfully. Credit Facility: These strategies helps the national bank in its capacity which is the directed improvement of bank credit and money supply. So it arrives at to anyone who needs it. Price Control: Inflation is a pointer to expanding investment development however it ought to be in a point of confinement to keep that in utmost national bank requirements to support the costs of products and administrations. Instruments of Monetary Policy: 1.Conventional Instruments: a.
The Federal Reserve loan policy is that if it’s an “easy money” policy that’s in effect then the interest rates are low and the loans are easy to get. It’s important in this economy because without it the banks would have had loaning problems and they would have run out of money. It was originally created by the congress to provide the nation with safe and stable financial and monetary system. On the other hand monetary policy is the expansionary or contraction of the money supply in order to influence the cost and the availability of credit. The three major and two minor tools that the fed can use to conduct monetary policy are easy money policy, tight money policy, reserve requirement, open market operations, and the discount rate.
In order to facilitate the growth of assets a firm must control its assets by matching production and sales. To manage sales and productions, organizations “employ level production methods to smooth production schedules and use manpower and equipment efficiently at a lower cost” (Block & Hirt, ... ... middle of paper ... ...ting in hedging activities in the financial futures market companies are able to reduce the future risk of rising interest rates. By participating in the financial futures market companies are able to trade financial instruments now for a future date (Block & Hirt, 2005). Maintaining a company’s financial assets is a daunting task. Cash management techniques and short-term financing provide accounting executives with the tools needed to survive the constant changes within the economy.
The Central Bank The central bank is a financial institution that organizes the government’s finances, controls money and credit of the economy and assists as the bank to commercial banks. The roles of the central banks are to create money and develop Monetary Policies. Monetary Policy can be used to give assistance in the way an economy is currently operating in. Monetary Policy has two effects, expansionary policy and restricted policy. Expansionary policy helps lower interest rates and raise inflation in the economy; this policy improves growth for short run for the overall performance of the economy.
Internationally, a central bank would solidify the United States as a world economy by instilling confidence to foreign economies that would be more comfortable dealing with an orderly national bank than fickle individuals. Nationally, it would facilitate financial transactions between consumers and producers and address the needs for currency and its stability (“In Plain English” 2). “Another important issue was creating a balance between the private interests of banks and the centralized responsibility of government. What emerged—the Federal Reserve System—was a central bank under public control, with many checks and balances” (“In Plain English” 2). Purpose, Duties, and Features The Federal Reserve—or the Fed, as it has been kindly dubbed— serves as the central bank for the United States.
For example if the business financial reports shows a good amount of profit and growth in the business every year, investors will feel assured about the company and thus make the decision to invest in the business. Historical costs are also more consistent in showing data in a way that the prices record in the balance sheet is the acquisition price of the asset. Therefore the price of the asset recorded are not easily manipulate because all they have to do is to record the exactly value of the original price which they are then measured objectively. Another advantage is that the historical cost can be verified. The acquisition cost of the product at that time of purchase is documented with invoices, payments and tax bill.
The IMF focuses mainly on a country's macroeconomic policies—that is, policies relating to the government's budget, the management of money and credit, and the exchange rate—and financial sector policies, including the regulation and supervision of banks and other financial institutions. In addition, the IMF pays due attention to structural policies that affect macroeconomic performance—including labor market policies that affect employment and wage behavior. The IMF advises each member on how its policies in these areas may be improved to allow the more effective pursuit of goals such as high employment, low inflation, and sustainable economic growth—that is, growth that can be sustained without leading to such difficulties as inflation and balance of payments problems. The IMF's Purposes The purposes of the International Monetary Fund are: i. To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems.
Monetary and fiscal policy and their applications to the third world countries with a huge informal sector This essay seeks to explain what are monetary and fiscal policy and their roles and contribution to the economy. This includes the role of the government in regulating the economical performance of a country. It also explains the different features and tools of monetary and fiscal policy and their performance when applied to the third world countries with a huge informal sector. Monetary Policy Monetary policy is the mechanism of a country’s monetary authority (usually the central bank) taking up measures to regulate the supply of money and the rates of interest. It involves controlling money in the economy to promote economic growth and stability by creating relatively stable prices and low unemployment.
It does put them in a position where they could boost their lending. Hence, depending on banks’ response to their increased liquidity, there may or may not be a subsequent expansion in broad money. In additional, the central bank obviously finds its balance sheet increases in size. Second, suppose that the seller of bonds is non-bank companies. Their holdings of bank deposits will increase because the central bank will pay for the bonds by a cheque or other form of transfer that will credit their account with the value of the bonds.
“Intellectual property: Napster and ethics,” 9 April 2001. Network World. 10 February 2004. <http://www.itworld.com/Net/4159/NWW010409kearns/>.  Barlow, John Perry.