Economic Swat

Money Market:- Money market is a short-term funds market and it deals in financial assets whose maturity period is upto 1 year. Money market is not deal in money or cash as such but simply provides a market for credit instrument such as promissory notes, bill of exchange, commercial paper, treasury bills, etc. These financial instruments are close substitute of money. Indian money market consist of Reserve Bank of India, Commercial Bank, Co-operative Bank and other specialised Financial Institutions. The leader of money market in India is Reserve Bank of India.(RBI). Indian money market also operate some Non-Banking Financial Companies (NBFCs) and Financial Institutions like LIC, GIC, UTI, etc. Types of Money Market:- 1- Treasury Bills (T-Bills) 2- Certificates of Deposits (CDs)  3- Commercial Papers 4- Banker's Acceptance 5- Repurchase Agreements 1- Treasury Bills (T-Bills):- Treasury bills are issued by Reserve Bank of India on behalf of Central Government for raising money. 2- C...

Deflation:- Deflation is a decrease in general price level of goods and services in an economy. Depression usually happens when demand is low or when supply is high. Causes of depression:- 1- Structural Change in Capital Market 2- Decrease in Currency Supply 3- Increase Productivity Effect of deflation:- 1- Reduced Business Revenues 2- Lowered Wages and Layoffs 3- Reduced Stake in Investments 4- Changes in Customer Spending 5- Reduce Credit

Inflation :-  The rate at which the cost of goods and services rises over a given period of time is known as inflation.   OR- A percentage increase in the general price level of goods and services is known as inflation. In other words, it increases your cost of living. Types of inflation:- There are two main types of inflation. 1- Cost push inflation - when a rise in prices is caused by a rise in the cost of production. 2- Demand pull inflation - when a rise in prices caused by rising aggregate demand and firm pushing up prices due to the storage of goods. Types of Inflation on the basis of how fast price increases - ● Creeping inflation -  when the rate of interest slowly increases overtime that is from 1 to 4% a year. ● Walking inflation or moderate inflation - when the rate of inflation increases less than 10% that is from 2 to 9 % a year. ● Running inflation -  when rate of inflation increasing between 10 to 20% a year. ● Hyperinflation -  when t...