Answered: How can monetary policies created by a…

How can monetary policies created by a central bank affect financial markets and financial institutions? Instructions: Answer in 2 sentences

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter3: The Financial Environment: Markets, Institutions And Investment Banking

Section: Chapter Questions

Problem 8PROB

See similar textbooks

Related questions

Q: In which economic conditions would a central bankwant to use a “forward-guidance” strategy? Based…

A: Forward guidance refers to the communication from the central bank regarding the prevailing state of…

Q: HOW DOES INTEREST RATE AFFECT THE FINANCIAL MARKET AND FINANCIAL INSTITUTIONS

A: Interest rate is the rate of interest which is charged on borrowings in the economy.

Q: Define these money market instruments 1. Treasury bills 2. Certificates of Deposits

A: Money market is the market in which the debt intruments less than one year are deal with.

Q: Explain in detail the function played by the money market in the financial market.

A: Money market is a type of market which involves trading in short-term debt financial instruments.

Q: Which of the following statements is true so-called "shadow banking" sector ahead U.S. financial…

A: Shadow baking does the same function as that similar types of regular banking system but do not have…

Q: Assess the banking sector from the perspective of the Bank of Canada intere

A: Interest rate are important from the banking point of view the margin and profit of banks depend on…

Q: How do the central banks implement expansionary monetary policy using monetary policy tools?…

A: Solution Step (1) Expansionary Monetary Policy The expansionary fiscal policy works by increasing…

Q: What role do financial markets play in our economy and what is the relationship between financial…

A: Financial institutions are intermediaries that transfer funds, securities, other financial…

Q: What is the Federal Reserve System and how is a bank's balance sheet formed?

A: It tells about the Federal Reserve System and how is a bank's balance sheet formed:

Q: What are prudential standards in the context of bank regulation? Detail the requirements of two (2)…

A: Bank regulation is defined as the government regulation type, which used to be subjected to banks…

Q: fiat

A: Fiat standard or Fiat money issued by the government & has no back up of a physical commodity.…

Q: Give the most important things from the topic of Non-banking financial institutions

A: Solution- A Non-Banking financial Institution-(NBFI) could be a establishment that doesn't…

Q: Describe how financial intermediationand financial innovation affect bankingand the economy

A: Financial institutions refer to institutions that offer financial services in the financial market.…

Q: Describe the components of the balance sheet of a central bank? Example?

A: Balance sheet depicts the financial position of the bank, company or business. Balance sheet of…

Q: a) Calculate risk weighted assets. b) Does the bank satisfy capital requirements under Basel I? If…

A: a) Assets Risk weight % Cash 100 0 0 Government bonds 100 0 0 Secured mortgages 200 0 0…

Q: Which of the following is a tool that is used by the central bank to control the quantity of money?…

A: A central bank is a government-run organization in charge of overseeing the money supply, or the…

Q: )What is the role of a central bank? b)Why is it argued that a central bank should be independent…

A: A central bank is a financial institution having control over the production and distribution of…

Q: banking

A: Introduction: Banking can be defined as activities involving accepting money from both individuals…

Q: Explain the role of the Central Bank and critically evaluate the advantages and disadvantages of the…

A: The central bank performs a lot of roles which are discussed below: It maintains price stability.…

Q: Write an Executive Summary of Analyzing the lending process of a financial institution (Bank/NBFI).

A: Financial institutions, also known as banking institutions, are businesses that function as…

Q: 3) What is meant by Bank overdraft?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Discuss with examples why the money markets could be considered arguable as playing complementary…

A: The complementary role of Money Markets with banks is discussed as follows: The money market is a…

Q: Who decides about the level of reference rate? Select one alternative: financial market…

A: Reference rate is the benchmark interest rate used to set other interest rate. Example - LIBOR.

Q: what are the tools the Federal Reserve uses to control monetary policies. Expand on how the Federal…

A: Monetary policy is the tools and technique which is used by the government in order to control the…

Q: A mechanism of interbank transaction of islamic bank and conventional banks

A: Islamic banking or sharia-compliant finance a financing activity that complies with sharia through…

Q: Describe the different types of financial institutions and which banking authorities supervise them.

A: The financial market composed of a number of financial institutes that perform a variety of…

Q: FINANCE> CAPITAL MARKETS 1. What are the 2 classification of monetary standards and explain each.…

A: Since more than one question is posted at a time, the answer for first question is only provided at…

Q: What is one of the functions of the financial markets and how does financial institutions play a…

A: Financial markets Financial markets refer to that place where trading is done of all types of…

Q: 3. How do the central banks implement expansionary monetary policy using monetary policy tools?…

A: The policy that a central bank undertakes to raise the monetary expansion rate and promote domestic…

Q: Suppose that the central bank sells government bonds. Use a graph of the money market to show what…

A: If the central bank sells the government bonds then this kind of policy is stated as a…

Q: the importance and function of money.

A: Today, money has become the most important of our lives. We cannot imagine a day without money ,…

Q: How do you think financial institutions help financial market to work?

A: fInancial institutions -The firms and organizations involved in the collection and distribution of…

Q: is the meaning of Financial Markets? Name and differentiate all the types of financial markets

A: Step 1 Financial markets contribute to the smooth operation of economies by allocating resources…

Q: financial institutions im

A: Introduction : In simple words, financial institutions refers to the entities that are engaged in…

Q: To what extent does Money Market contribute to financial markets, and how

A: INTRODUCTION : Traders in financial instruments may participate in the market. It is possible to…

Q: Which of the following functions of the Commercial Bank's primary functions is influence by the…

A: Solution:- Reserve Requirement Ratio (RRR) means the minimum amount of deposit a bank has to keep…

Q: What are conventional monetary tools used by central banks?

A: The three conventional monetary policy tools which are used by the central banks are the discount…

Q: The roles of the Federal Reserve System include all of the following, except O clearing checks O…

A: Federal Reserve System is the apex and central banking system in the United States of America (USA).…

Q: Briefly explain the four principal tool used by bank of Ghana for monetary policy, stating clearly…

A: The key aim of the Bank of Ghana, as stated in Section 3 of the Bank of Ghana Act 2002, is to…

Question

How can monetary policies created by a central bank affect financial markets and financial institutions?

Instructions: Answer in 2 sentences

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

What is the purpose of the bank reconciliation?
Describe todays financial services marketplace, both depository and nondepository financial institutions.
( ) is responsible for conducting monetary policy by influencing money supply and interest rates. a. A Commercial Bank b. A credit union c. A Central Bank d. An investment bank
Explain the role of the banks in the financial system.
Which of the following is not a function of a Central Bank? Question 19Answer a. To regulate the issue, supply and availability of money. b. To manage the foreign exchange reserves. c. To advise government on monetary and fiscal matters. d. To manage the public and private debt in the country.
Write an introduction about the importance of stability in the financial system, and the importance of the central bank and financial institutions in achieving it. Explain briefly.
What can the central bank do to ensure financial stability before and after financial difficulties?
Suppose that the Reserve Bank "tightens" monetary policy. In what order do events occur when this happens? Answer: First: ? Second: ? Third: ? Fourth: ? Select from (the pic attached)
Give the most important things from the topic of Non-banking financial institutions?
FINANCE> CAPITAL MARKETS 1. What are the 2 classification of monetary standards and explain each. 2. Under the fiat standard or fiat money, which of the money is used by the Central Bank to stabilize the circulation of money in a country? 3. What are the types of liability. Explain each and give example.
The term ‘loanable funds' refers to: a. only those funds loaned by one bank to another bank. b. only those funds loaned to banks by the public. c. only those funds loaned to banks by the central bank. d. all those funds changing hands between the lenders and borrowers in the financial markets.
Which of the following is not a function of a Central Bank? a. To regulate the issue, supply and availability of money. b. To manage the foreign exchange reserves. c. To advise government on monetary and fiscal matters. d. To manage the public and private debt in the country.