Money Banking and Finance

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Money Banking and Finance

Requirements:

This assignment is in three (3) parts with each part carrying a maximum mark of Part A 35 marks Part B 35marks Part C 30 marks.

Guidance:

Students should approach this assignment as an academic essay, weighing the arguments for and against each issue, making comment on the literature and drawing logical conclusions. Harvard referencing is a key requirement of the assignment to demonstrate wider reading and to underpin the discussions, ensuring they have sufficient depth.

PART A

Question 1

The Federal Reserve has made the following decisions to implement the monetary policy stance announced by the Federal Open Market Committee in its statement on May 4, 2022:

” The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on reserve balances to 0.9 percent, effective May 5, 2022.”

Critically discuss the main reasons why the Federal Reserve is taking this decision to increase the interest rate. 17 marks

Question 2

Critically discuss how The Russia-Ukraine conflict has triggered turmoil in the financial markets, and drastically increased uncertainty about the recovery of the global economy. 18 marks

PART B

Question 1.

Critically discuss what Block Chain is and evaluate the technology on financial transactions and services.

impact  of  blockchain 17 marks

Question 2

Critically discuss the role of financial intermediaries in an economy.

18 marks

PART C

Question 1

There is a widespread belief amongst economists that one of the principal determinants of an economy’s rate of growth is the rate at which the capital stock expands and is replaced.

Critically discuss and evaluate this statement. 15 marks

Question 2

Critically discuss and analyse. Keynesian theory of inflation. 15 marks

Part A references

References

A global database on central banks’ monetary responses to Covid-19

Adrian (T.) and Shin (H.S.) (2007): “Liquidity and Leverage”. Journal of Financial

Intermediation. Forthcoming. Available on the New York Fed website as Staff Report no 328.

Adrian (T.) and Shin (H.S.) (2009): “Money, Liquidity and Monetary Policy” Forthcoming in

American Economic Review, papers and proceedings. Available on the New York Fed

website as Staff Report no 360.

Committee on the Global Financial System. CGFS Papers No 34. “The role of valuation and

leverage in procyclicality”. April 2009 (available on the Bank for International Settlements –

BIS-website).

Danielsson (Jon) and Shin(Hyun Song): “Endogenous Risk “;London School of

Economics

September, 2002.

For an analysis, see Kashyap and al. (2008).

BIS Review 94/2009 5

Kashyap (AK), Rajan (R.G) and Stein (J.C.) (2008) “Rethinking Capital Regulation”. Paper presented at the Federal Reserve Bank of Kansas City Symposium.

The Spectre of Price Inflation: Evidence, Theory and Policy Paperback – 20 October 2022 by Max (University of Missouri – St Louis) Gillman (Author)

Inflation Hacking: Inflating Investing Techniques to Benefit from High Inflation Hardcover – 14 February 2021 by Kendrick Fernandez (Author) federal Reserve’s Commercial Paper Funding Facility Tobias Adrian DIANE Publishing, 2010

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