Objectives of Central Banks

Central banks oversee the banking system in their country. They play an important role in managing a state's currency, money supply, and interest rates. There are five major objectives of central banks. Objectives of Central Banks 1. Inflation A central bank pursues a low and stable rate of inflation. 2. Employment It aims for a…
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Market Structure: Oligopoly

In an Oligopoly market structure, there are a few interdependent firms dominate the market. They are likely to change their prices according to their competitors. For example, if Coca-Cola changes their price, Pepsi is also likely to. Examples of Oligopolies In the wireless cell phone service industry, the providers that tend to dominate…
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Cost-Push Inflation

A fall or left shift in Aggregate Supply is the cause of Cost-Push Inflation. This shift can occur from an increase in the cost of production or decrease in the volume of production. An increase in the Aggregate Demand curve causes Demand-Pull inflation. An interaction of cost-push inflation and demand-pull inflation results in the Wage Price…
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Demand Side Policies

In Macroeconomics, Demand Side Policies are attempts to increase or decrease aggregate demand in order to affect output, employment and inflation.Demand Side Policies can be classified into fiscal policy and monetary policy. In general, demand-side policies aim to change the aggregate demand in the economy. Aggregate Demand is made up of…
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Introduction to the Bill of Exchange

A bill of exchange is a specialized type of international draft used to expedite foreign money payments in many types of international transactions. In addition, a draft is commonly used in the U.S. while a bill of exchange is primarily used outside the U.S. A negotiable instrument is a signed writing, containing an unconditional promise or…
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Theory of Production: Cost Theory

In the Cost Theory, there are two types of costs associated with production - Fixed Costs and Variable Costs. In the short-run, at least one factor of production is fixed, so firms face both fixed and variable costs. The shape of the cost curves in the short run reflect the law of diminishing returns. Cost Theory - Types of Costs A.…
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