Monetary, Investment, and Trade Issues

Description

Monetary economics provides a framework for analyzing money in its functions as a medium of exchange, store of value and unit of account. Monetary economics is concerned with the effects of monetary institutions and policy on economic variables including commodity prices, wages, interest rates, quantities of employment, consumption, and production. Monetary theory is based on the idea that a change in money supply is the main driver of economic activity. It argues that central banks, which control the levers of monetary policy, can exert much power over economic growth rates by tinkering with the amount of currency and other liquid instruments circulating in a country's economy. A business needs cash to purchase fixed assets, such as land, building, equipment and machinery, as well as to take care of day-to-day operating expenses. The money invested in a business for the purchase of fixed or large assets is called capital investment. Capital investment decisions are crucial as their impact on a business is long term. Thus, it is important to evaluate the economic feasibility of the investment. International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history, its economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders. This book on Monetary Economics which combines within its fold a systematic discussion of institutions, theory and policy concerning money and credit in India. This book analyses the theories of money, income and interest.