Category: General Concepts.

Credit Creation by Commercial Bank

•         A commercial bank is called a dealer of credit. •         It can create credit i.e. can expand the monetary base of…

Essentials of a Sound Banking System

A sound banking system promotes all round economic development of an economy. A good bank must have the following features…

Functions of a Commercial Bank

• Modern commercial banks perform a variety of functions and provide a number of services to their customers. • They…

BANK

•         A bank is said to be a financial intermediary. •         It stands midway between the savers and the users of fund.…

LIQUIDITY PREFERENCE AND MARGINAL EFFICIENCY

Liquidity preference refers to the demand for money, considered as liquidity. The concept was first developed by Keynes to explain…

INVESTMENT AND RATE OF INTEREST

• Investment = a change in the stock of capital over a period of time. • Investments are undertaken upto…

Control of Inflation

Impacts of Inflation

Inflationary pressure in an economy my generate good effects on the economy, particularly in case of ‘creeping’ or ‘walking’ inflation.…

True Semi-inflation

True inflation • It takes place after full employment of all factor inputs in an economy. • In a situation…

Hyper Moderate Inflation

Hyper Inflation • The price level goes on rising at a very fast rate. • Often there happens hourly increase…

Cost Push Open Inflation

Cost Push Inflation • Inflation may originate from supply side also. • Aggregate demand remaining unchanged, a fall in aggregate…

Forms of Inflation

Inflation may be of different forms, such as: Demand Pull Inflation • When in an economy aggregate demand exceeds aggregate…