Federal government deficit financing may have a very great influence on monetary and credit conditions. Explain.
Answer to relevant QuestionsDiscuss the various objectives of debt management. Explain the potential for deposit expansion when required reserves average 10 percent and $2,000 in excess reserves are deposited in the banking system. What is meant by the statement that the international monetary system has operated mostly under a “gold standard”? What are the major criticisms associated with being on a gold standard? Describe the activities and economic role of the arbitrageur in international finance. Commercial letters of credit, traveler’s letters of credit, and traveler’s checks all play an important role in international finance. Distinguish among these three types of instruments.
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