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What role does the central bank play if the fixed rate is set below market equilibrium?
If the fixed rate is set below market equilibrium , the central bank plays an important roll as follows:
1) They will not return the money anyone invested
2) They can bully the government to give them money
3) They will stole another banks money for their need
4) They will encounter police
What else can I help you with?
What are two effects of having a fixed price other than equilibrium price forced on a market?
Imposing a fixed price in a market can lead to shortages if the price is set below the equilibrium, as demand may exceed supply at that price, causing consumers to compete for the limited goods available. Conversely, if the fixed price is above equilibrium, it can result in surpluses, where suppliers produce more than consumers are willing to buy. Both scenarios disrupt the natural balance of supply and demand, leading to inefficiencies and potential long-term market distortions.
Advantages of a fixed rate of exchange?
A fixed exchange rate system is one where the value of the exchange rate is fixed to another currency. This means that the government have to intervene in the foreign exchange market to maintain the fixed rate. The equilibrium exchange rate may be either above or below the fixed rate. In Figure 1 below, the equilibrium is above the fixed rate. There is a shortage of the national currency at the fixed rate. This would normally force the equilibrium exchange rate upwards, but the rate is fixed and so cannot be allowed to move. To keep the exchange rate at the fixed rate the government will need to intervene. They will need to sell their own currency from their foreign exchange reserves and buy overseas currencies instead. This has the effect of shifting the supply curve to S2 and as a result, their foreign currency holdings will rise.
True or false A price fixed below the equilibrium price of a product will cause a shortage of that product?
true
Shift in demand?
Laws of demand and supply is based on the assumption that other things (given market, fixed set of customers whose income are not changed whose taste remains same and the price of substitutes or complementary goods also remains unchanged) will remain same and if there is any change in any such factors it will cause shift in demand and supply curve and there will be new equilibrium price and equilibrium quantity.
What factors may cause a change in the market and fair value of fixed rate notes and bonds?
One of the key factors that can change the market and fair value of fixed rate notes and bonds is an increase or decrease in market interest rates. Even though a bond has a fixed rate, it's value is dependent on current yields in the market and the value of the bond will move inversely to interest rate changes.
Advantages of a fixed rate of exchange?
A fixed exchange rate system is one where the value of the exchange rate is fixed to another currency. This means that the government have to intervene in the foreign exchange market to maintain the fixed rate. The equilibrium exchange rate may be either above or below the fixed rate. In Figure 1 below, the equilibrium is above the fixed rate. There is a shortage of the national currency at the fixed rate. This would normally force the equilibrium exchange rate upwards, but the rate is fixed and so cannot be allowed to move. To keep the exchange rate at the fixed rate the government will need to intervene. They will need to sell their own currency from their foreign exchange reserves and buy overseas currencies instead. This has the effect of shifting the supply curve to S2 and as a result, their foreign currency holdings will rise.
True or false A price fixed below the equilibrium price of a product will cause a shortage of that product?
true
What is the difference between government securities market and corporate debt securities market?
Government Securities Market : Consists of securities issued by the State government and the Central government. This include Central Government securities, Treasury bills and State Development Loans. Debt securities market : Is a market for the issuance, trading and settlement in fixed income securities of various types. Fixed income securities can be issued by a wide range of organizations including the Central and State Governments, public bodies, statutory corporations, banks and institutions and corporate bodies.
Who are the targeted customer for fixed deposit in India?
WHO ARE THE MAJOR TARGET MARKET FOR FIXED DEPOSITS WHO ARE THE MAJOR TARGET MARKET FOR FIXED DEPOSITS Identify the major target market of fixed deposit
Where the fixed point is used?
Fixed points are commonly used in mathematics and computer science to solve equations and optimization problems. They are also employed in control systems to stabilize processes and in economics to analyze market dynamics. Additionally, fixed points are utilized in physics to study equilibrium states and in network theory to understand stability and convergence.
Is oscillation about a fixed point a solid liquid or gas?
Oscillation about a fixed point is a characteristic of all states of matter - solid, liquid, and gas. It refers to a back-and-forth movement or vibration of particles around a central or equilibrium position. In solids, the particles oscillate in fixed positions; in liquids, they move more freely; and in gases, they move rapidly and randomly.
Who fixed the price in the market?
As far as i know the price is being fixed by the government only
Is passive equilibrium the same as equilibrium?
No, passive equilibrium refers to a state where a system remains at rest or in a fixed position without external energy input. Equilibrium, on the other hand, is a state in which opposing forces or influences are balanced. Passive equilibrium can be a type of equilibrium but not all equilibriums are passive.
What is the definition of electrostatic equilibrium?
Electrostatic equilibrium simply means that no net force is acting on the charged particle, and it doesn't accelerate, ie it's a charge fixed in space
What are some examples of fixed income products available in the market?
Some examples of fixed income products available in the market include government bonds, corporate bonds, certificates of deposit (CDs), and fixed annuities.
Which fixed annuities pay the best for investments?
Fixed annuties are guaranteed to drop below a preset or fixed return on your investment. They are usually tied to the stock market. For a review of different type of annuities check out www.bestfixedannuity.info/ Fixed annuities that have the highest rates are the ones that will pay the most.and that have no withdraw or surrender charges. All of these factors are to be considered when looking for the best returns paid.
What is a fixed interest?
Fixed interest means that the interest on a loan or deposit does not change as the result of market fluctuations.
