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Chapter 14: Q.1 (page 387)

Should central banks be privately or publicly owned? Explain.

Short Answer

Expert verified

Central bank ought to be publicly owned in light of the fact that they are more straightforward and have a superior premium in the public.

Step by step solution

01

Content Introduction

A central bank is a financial institution and a monetary group given privileged manage over the manufacturing and distribution of cash and credit score for a country or a set of nations. In present day economies, the important financial institution is commonly liable for the system of financial coverage and the law of member banks.

02

Content Explanation

Central bank ought to be publicly owned in light of the fact that they are more straightforward and have a superior premium in the public.

Privately owned banks might be without difficulty encouraged through the proprietors to behave in their personal interest.

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Most popular questions from this chapter

Why might eliminating the central bank’s independence lead to a more pronounced political business cycle?

The structure and the policy of the People’s Bank of China (PBoC) differentiate it from traditional models of central banking systems. What are the main differences? What are the consequences of the PBoC system for other economies?

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