CHAPTER 8 Flashcards
(23 cards)
WHATIS FIAT MONEY
FIAT MONEY IS BASICALLY A MONEY LEGALLY ISSUED BY THE GOVERNMENT AUR USKO SARKAAAR HI BACK KARTI HAI
( EX- 100 200 KA NOTE)
MONEY DEMANDED IS
DERIVED DEMAND
QUANTITATIVE THEORY OF MONEY
1)FOR TRANSACTIONS
CAMBRDGE APPROACH
1) TRANSACTIONS
2) EMERGENCY
KEYNESS THEORY
1) TRQANSACTIONS
2) EMERGENCY
3) SPECULATIONS
CREDIT MONEY
JO PAISA BANK DE (LOAN WALA MONEY)
KEYNESIAN THEORY OF DEMAND FOR MONEY IS ALSO KNOWNS AS
LIQUDITY PREFERENCE THEORY
INTEREST RATE ( MARKET KA ) AND
BOND PRICES ARE
NEGATIVELY/ INVERSELY RELATED
JAB DESH LIQUIDITY TRAP MEI FAS JAATA HAI TO
RBI KI EXPANSIONARY FISCAL POLICY KAAM NAHI KARTI HAI
(BECAUSE JITNE BHI MONEY SUPPLY KYU NAA HO WO END MEI SAVE HI KARLENGE RATHER THAN INVESTING )
OPPORTUNITY COST OF HOLDING MONEY KYA HOTA HAI
Wo return jo tum lose karte ho jab paisa invest karne ke bajay cash ke form mein rakhte ho.
RISK AVERSION KI BAAAT KISNE KI
TOBIN
MONEY INJECTED THROUGH CENTRAL GOVERNMENT
HIGH POWERED MONEY
MONEY CREATED BY BANKS
CFREDIT MONEY ( BY LOANS AND SHITS)
REPO RATE
WO INTEREST JAB BANK RBI SE LOAN LETA HAI BY GIVING ANYTHING COLLATERAL
COMMERCIAL BANK————–. RBI
FIR BAAD MEI BANKS PAISE DEKE COLLATERAL KO REPURCHASE KAR SAKTE HAI YE EK TYPE KA REPURCHASE AGREEMENT HAI
(LAF)
LIQUIDITY ADJUSTMENT FACIITY
EK TYPE KI FACILITY JISME RBI BANKS KE SECURITIES KO MORTAGE MEI LEKE PAISE DE DETA HAI WHICH CAN BE CALLED AS A LIQUIDITY THING EASILY FOR THERE SECURITIES TO BE CONVERTED INTO CASH EASILY
(MSF)
MARGINAL STANDING FACILITIES
REPO RATE + 1%
( it act as a penalty or a penal rate for banks in majboori from RBI for not having extra reserve )
RBI IS
the lender of my lastt resorts ( the banks)
due to MSF facilities
REQUIRED RESERVE RATIO
= CRR + SLR
REVERSE REPO RATE
= REPO RATE - 1%
( basically it is the money of the commercial banks deposited within RBI uska hi interest hai ye )
MARGIN REQUIREMENTS
PROPERTY FOR COLLATERAL( 100 CR)
BANK ACTUALLY GAVE ( 90 CR)
10 CR - MARGIN REQUIREMENT
RBI IS MANDATED TO
1) PUBLISH MONETARY POLICY REPORT
2) IN EVERY 6 MONTHS
3) FOR UPTO 6-18 MONTHS KI FORECASTING
AGAR JO INFLATION RATE SET HAI WO TAB HI FAIL MAAANI JAATI HAI JAB
MATLAB LIMIT BAR SE BAHR HAI FOR
( UPTO THREEE QUARTERS 9 MONTHS )
EKDM ZADA HAI YAA EKDUM KAM
lower limit yaa upper limit ke bahar matlab
IF REPO RATE IS 5%
THEN
1) REVERSE REPO RATE IS
= repo rate- 1%= 4%
2) MSF
= repo rate+ 1%= 6%
