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Yogita Ingle 6 years, 11 months ago
Intrinsic value is a way of describing the perceived or true value of an asset. This is not always identical to the current market price because assets can be over- or undervalued. Intrinsic value is a common part of fundamental analysis, which investors use to assess stocks, as well being used in options pricing.
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Yogita Ingle 6 years, 11 months ago
- Demonetization is not a big disaster like global banking sector crisis of 2007; but at the same time, it will act as a liquidity shock that disturbs economic activities.
- Consumption will be hit: When liquidity shortage strikes, it is consumption that is going to be adversely affected first.
- Loss of Growth momentum– India risks its position of being the fastest growing largest economy: reduced consumption, income, investment etc. may reduce India’s GDP growth as the liquidity impact itself may last three -four months.
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Yogita Ingle 6 years, 11 months ago
When a commercial bank faces financial crisis and fails to obtain funds from other sources, then the central bank plays the vital role of ‘lender of last resort’ and provides them with the financial assistance in the form of credit. This role of the central bank saves the commercial bank from bankruptcy. Thus, the central bank plays the role of guarantor for the commercial banks and maintains a sound and healthy banking system in the economy.
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Yogita Ingle 6 years, 11 months ago
| Microeconomics | Macroeconomics |
| It is study of individual economic units of an economy. | It is study of the economy as a whole and its aggregates. |
| It deals with individual income, individual prices and individual outputs, etc. | It deals with aggregates like national income, general price level and national output, etc. |
| Its central problem is price determination and allocation of resources. | Its central problem is determination of level of income and employment. |
| Its main tools are demand and supply of particular commodity/factor. | Its main tools are aggregate demand and aggregate supply of the economy as a whole. |
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Money or Credit Creation by Commercial Banks Commercial banks increases the flow of money in an economy by credit creation. This process of credit creation is an outcome of its two primary functions, i.e. acceptance of loans and advancement of deposits.
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Yogita Ingle 6 years, 11 months ago
As the government has started promoting foreign capital, it will lead to an increase in the availability of resources, thereby shifting the Production Possibility Curve (PPC) parallelly to the right. Hence, an economic value is reflected in terms of increased output and resources.
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