Floating interest rate

The monetary policy of a country is the process by which the central monetary authority, controls the supply of money in the economy. Through open market operations, the central bank is able to affect the level of money market interest rates. The term structure of interest rates play an important role in determining the effectiveness of monetary policy. The objective of the present paper is to analyse the impact and…

Table 9 shows the bond profit and interest profit in pecentage fomat. The first row showing year 1989 would mean year 1989 is the year where the investment was started, not the year where the profit will be obtained. This means for year 1989, the profits will be obtained at year 1999. The bond profit is calculated by multiplaying the bond rate and the total devaluation after 10 years. For instance, for year 1989, the bond rate was 10.27 (Table 4) and total devaluation is 8.95. This will give a…

India, is a developing country, that is strongly built through its exports, has a constant rate of economic growth per year, and the country that was least affected by the global financial crisis, out of the three. When looking at 2008 to 2010, even though this was when the crisis transpired, India was still able to have a GDP growth rate over 2%. This did not mean that India was able to avoid the financial crisis, but rather dampen the effects of it, relative to the United States of America. In…

Issue: The crisis of 2007-08 demonstrated that macroeconomics and macroeconomists failed as a social science and a profession. The objectives of macroeconomics as a social science are twofold: to understand the complex workings and drivers of the global economy through models and predict the economic changes in the near future. Successfully macroeconomists not only grasp the intricate webs of our economy but also are able to advise on policies that would ensure economic stability and…

and interest rates which is used within central banks. Central Banks are a government institution that has responsibility for the amount of money and credit supplied in the economy as a whole. • United States and European bonds are becoming a safer option while interest rates in China are just beginning to cut interest rates. Low global bond rates are making bonds in the US more attractive because they’re on a higher yield. • The United States government bonds have risen since global interest…

(2) Discount rates and (3), Reserve supply. In discussing open market operations, we must first establish that this tool is not so much the enforcement of policy as it is a process to maintain market continuity. The vast majority of open market operations are not intended to carry out changes in monetary policy. Instead, open market operations are conducted on a daily basis to prevent technical, temporary forces from pushing the effective federal funds rate too far from the target rate. The…

the purchase of stocks, bonds, and other investments. 2. What are depository and nondepository financial institutions? How do they differ? Depository institutions get their money from their customer’s deposits and they get most of their money from interest paid on loans made to customers. . They are what most people think of when you hear the word bank. Non-depository institutions are similar to mortgage, finance, and insurance companies. Non-depository institutions get their money from outside…

A. In finance, we like to say that your dollar is worth more today, than it is tomorrow. However, what if I told you that the legalization of abortion is going to hurt bottom lines? You may be asking yourselves, how so? The answer is simple. The side effects, doctor visits and lifestyle changes are all contributors towards financial instability. Abortions aren’t cheap, obviously, but when those side effects hit, they are not simply going to cause damage physically and mentally. Those abortion…

of Japan has been experimenting with negative interest rates as a new way to boost their economy. I will be using two articles to talk about this current event, in this paper. My main article that I will be using is “Japan’s Negative Interest-Rate Experiment Is Floundering” and my second article is called, “Everything You Need to Know About Negative Rates” will help supplement the first article so that we can a better understanding of negative rates. I believe that this subject relates to a lot…

money is a widespread if rather flawed assumption which underpins much of mainstream macroeconomics. Political economists disagree with this assumption due to the endogenous nature of monetary supply, encompassing reverse causation and exogenous interest rates. It would be inappropriate to discuss neutrality of money or the rejection thereof without first discussing money itself. At its most basic, money is something deemed by an economy to have consistent numeraire value suitable for exchange…