MGT411- Money & Banking (Session - 2)

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Question No: 46 ( Marks: 5 )
"Principal function of Commercial banks is to receive demand deposits and to make short-term loans".Discuss

Question No: 47 ( Marks: 5 )
Give brief explanation of the following.
What is reserve requiremnet?
How is it controlled?
What is its impact on economy?

Question No: 48 ( Marks: 10 )
a) If people suddenly lost faith in the banking system, what would happen to the demand for money? What impact would their loss of confidence have on inflation?

b) Why is inflation higher than money growth in high inflation countries and lower than money growth in low inflation countries?


Question No: 49 ( Marks: 10 )
Discuss the force of real interest rate on:
I. Monetary policy
II. Aggregate demand



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