Unit 4 Flashcards
1
Q
Types of
MARKET FAILURE IN FINANCIAL SECTOR
A
Asymmetric information Externalities Moral hazard Speculation and market bubbles Market rigging
2
Q
ROLE OF CENTRAL BANK
A
Banker to the gov
Implement monetary policy
Banker to banks - lender of last resort
Regulation of banking industry
3
Q
Changes in
PUBLIC EXPENDITURE
Has an Effect on..
A
Productivity and growth Level of taxation Living standards Equality Crowding out
4
Q
TAXATION
What it effects
A
Incentives to work Tax revenue: laffer curve Income distribution Real output and employment Price level Trade balance FDI flow
5
Q
FACTORS EFFECTING GROWTH AND DEVELOPMENT
SAVED FIDC
A
Debt Capital flight Foreign currency gap Savings gap: Harrod - Domar Volatility of commodity prices Demographic factors Infrastructure Education Access to credit and banking
6
Q
INFLUENCING ECONOMIC GROWTH
Market orientated strategies
A
Trade liberalisation Promotion of FDI Removal of gov subsidies Floating exchange rate Microfinance schemes Privatisation
7
Q
INFLUENCING ECONOMIC
GROWTH
Interventionist strategies
A
Protectionism Managed exchange rates Buffer stock schemes Development of human capital Infrastructure development Promotion of joint ventures
8
Q
INFLUENCING ECONOMIC GROWTH
Other strategies
A
Debt relief Aid Development of tourism Industrialisation: Lewis model Fair trade schemes Development of primary industries
