vu cs201 Mid Term Subjective Solved Past Paper No.11
vu cs201 Introduction to Programming Solved Past Papers
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- 1- Expected inflation
- 2- Expected return on stocks and other assets
- 3- Risk relative to alternatives
a. An increase in the Central Bank's Inflation Target
b. An increase in the Long-run real interest rate
a. Increase in central bank's inflation target shifts the monetary policy reaction curve to right
b. Increase in long run real interest rate shifts the curve to left.
Banks monitor Stabilizes the Economy
Control the availability of money and credit in so it can keep low inflation, high growth, and stability of the financial system
A stable economy grows faster than an unstable one so bank plays vital role. Banks mitigate risk by taking deposits from a large number of clients and make numerous of loans , thus giving each depositor a small stake in each of the loans. So it provide economic of scale.
