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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
Can central banks fix the rate of exchange?
Yes, central banks can fix the rate of exchange through a system known as a fixed or pegged exchange rate regime. In this system, the central bank commits to maintaining the currency's value at a specific rate relative to another currency or a basket of currencies. To maintain this fixed rate, the central bank may intervene in the foreign exchange market by buying or selling its currency. However, sustaining a fixed exchange rate can be challenging and may require substantial reserves and consistent economic policies.
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 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
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
What are short and long term equilibrium?
Short-term equilibrium refers to a temporary state in which supply and demand in a market are balanced, but may not reflect the full potential of the market due to various constraints, such as fixed resources or prices. In contrast, long-term equilibrium occurs when all factors of production can be adjusted, allowing the market to reach a stable state where supply equals demand at a level that reflects the true costs and benefits of production, including adjustments in prices and resource allocation. Over time, long-term equilibrium is more sustainable, as it incorporates changes in technology, consumer preferences, and resource availability.
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.
Can central banks fix the rate of exchange?
Yes, central banks can fix the rate of exchange through a system known as a fixed or pegged exchange rate regime. In this system, the central bank commits to maintaining the currency's value at a specific rate relative to another currency or a basket of currencies. To maintain this fixed rate, the central bank may intervene in the foreign exchange market by buying or selling its currency. However, sustaining a fixed exchange rate can be challenging and may require substantial reserves and consistent economic policies.
Who fixed the price in the market?
As far as i know the price is being fixed by the government only
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
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.
