Functions of the Federal Reserve System
The Federal Reserve System looks after the financial activities and operations of the banking system. It is the apex body that has complete control over the banking regulations. All the guidelines regarding the banking system, money supply, and formulation of the monetary policy come under the purview of the Federal Reserve System. The New York Fed also helps in drafting the monetary policy and supervising the financial system.
Elastic and Inelastic Markets
Measuring the change in percentage of an economic variable with respect to change in a different economic variable is known as elasticity. This change in percentage results in a change in price concerning changes in other factors. In simple terms, when one factor brings a change to another factor, it is called elasticity.
Question 3
In boosting macro and micro level business as a result of Covid-19, the government of Ghana as part of the strategy to restore confidence in the economy is providing a Ghc 1 billion stimulus package. Discuss fours ways that the financial market can benefit from this package.
Ghana has been affected by Covid-19. There is slow economic growth, the financial conditions have gone bad, and there is pressure on exchange rate.
The government revenue is lower, and the expenditure is higher owning to the pandemic. There is huge fiscal financing gap. Thus, the stimulus package of Ghc 1 million will restore confidence, meet urgent financial needs, etc.
The growth may fall by 1.5% as per the reports. The inflation would rise, there is current account deficit, and the government financing needs are going to be higher.
4 ways the financial market will benefit are as follows:
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