According to you, what do you think is the role played by a Banking system (Central Bank and Commercial Banks) in circulation of money in an Economy and its development. (in 120-150words)
Answers
If a nation’s economy were a human body, then its heart would be the central bank. And just as the heart works to pump life-giving blood throughout the body, the central bank pumps money into the economy to keep it healthy and growing. Sometimes economies need less money, and sometimes they need more.The methods central banks use to control the quantity of money vary depending on the economic situation and power of the central bank. In the United States, the central bank is the Federal Reserve, often called the Fed. Other prominent central banks include the European Central Bank, Swiss National Bank, Bank of England, People’s Bank of China, and Bank of Japan.
Let's take a look at some of the common ways that central banks control the money supply—the amount of money in circulation throughout a country.
Answer:
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