MONEY AND BANKING ASSIGNMENT Example | Topics and Well Written Essays - 2250 words

MONEY AND BANKING - Assignment Example the lending rate or the reserve requirement, which will allow banks to borrow funds at a lower rate from the central bank and also increase their own fund capacity. Banks borrowing at lower rates will pass the benefit to its client, resulting in lower lending rates of bank. If the cash reserve ratio (CRR) falls, the commercial banks will have to keep a lesser amount of reserve in the central bank. Therefore, they will pass the reserve to their customer as loans through a lower lending rate and demand for loan will also be increased, which directly increases the demand for reserve of the commercial banks to their central bank. It implies that there will be a credit growth, i.e. more loans are offered at a low interest rate. The credit expansion will lead to increased borrowing by corporate and retail segments for investment purposes (Mishkin, 2007). Money borrowed by companies will be invested in their business expansion that leads to increased money supply in the economy. The retail segment borrowing also lead to increased money supply as they borrow funds to buy homes, cars, home decor, etc that leverages these sectors to produce more. This results increased growth. Usually interest rate target and money supply are inversely related i.e. if interest rate is lowered, demand for bank reserve will increase and accordingly money supply will rise through lower lending rate of the commercial banks (Gowland, 2013). The above figure represents the effect of interest rate on money supply in an economy. The x axis shows the interest rate and the y axis represents the quantity of money supply. With given level of interest rate of 7% the MS line is the red line which intersects with the money demand line MD. The MD follows the general rule of a demand curve i.e. downward sloping. When the interest rate is reduced to 6%, the MD rises, which pushes the money supply line to a new equilibrium. There is a shift in the MS line from red to

By drawing on examples examine the impact of social networking sites Essay - 1

By drawing on examples examine the impact of social networking sites on society - Essay Example Trends and statistics suggest that the sector has not only brought about significant transformation in the manner in which people interact but has also has acted as a major stimulus for global business (Gatautis, 2008). From social issues to political agendas and corporate strategies, all aspects of society are embraced and catered to by social networking sites. These sites offer a platform to the users to exchange their ideas, anonymously or publicize their views and announce it to the world. It is this flexibility offered by the SNS that makes it the most sought after internet trend in contemporary times. The term social networking is often used interchangeably with other terms such as internet social networking, social web sites, or social networking services; although all of them convey the same meaning. According to Richter et al., (2009) Internet social networking can be defined as "the phenomenon of social networking on the internet". While Kim et al, (2010) define social web sites as "those web sites which make it possible for people to form online communities and share user-created contents". The social networking sites have caused significant impact in various spheres of an individual’s everyday life including the social, political as well as economical. Some of which are discussed below. The probable impact of social networking as a phenomenon on the society can be perceived and gauged in more ways than one. For instance, social networking sites such as Facebook offers users an opportunity to create common interest groups and help them exchange their ideas and present their views in a group of likeminded individuals, thus empowering them to voice their opinions, say for instance, against social injustice or in favor of a social cause. The strength of collective action is magnified by sharing and exchanging of ideas through common groups and helps bring about