Answered: Do we really need a Central Bank in our…

Business

Operations Management

Do we really need a Central Bank in our Country?

Foundations of Business (MindTap Course List)

6th Edition

ISBN:9781337386920

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter1: Exploring The World Of Business And Economics

Section1.5: The Business Cycle

Problem 3CC

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Concept explainers

Monetary Policy

Monetary policy means the process through which a central bank or other financial authorities manage the money supply in an economy. It is an attempt to reduce inflation and contributes to the stable gross domestic product (GDP) to lower unemployment. The monetary authority reduces the interest rate for price stability in a nation’s currency. The central bank of a nation governs monetary policies and controls the overall money supply available to banks and customers.

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Do we really need a Central Bank in our Country?

If they are so important to the fiscal and monetary objective of any country, why have their roles as a financial watchdog as it relates to several economic crisis, open more suspicion. In fact they seem most of the times totally unprepared to deal with the pending economic fallout? Many will argue as well that the CB seem to be more reactive rather than proactive. Critically discuss.

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