Question

Financial markets are an essential area to attend to as part of the macroeconomic strategy of countries and territories. Research about the following topics in writing.

- Functions of money

- Central bank role in the economy

- Monetary policy

- The balance of payments (BOP)

- Exchange rates between international currencies

Answer 1

1. Functions of money- In terms of the three functions or services it provides, money is also specified. Money acts as a trading medium, as a store of value, and as an unit.of account

2. Central bank role in the economy- A central bank is a national autonomous body conducting monetary policy, controlling banks, and offering financial services like economic analysis. The aims are to stabilize the currency of the country, to keep unemployment low and to avoid inflation.

3. Monetary policy- Monetary policy is the central bank's macroeconomic agenda. It includes money supply and interest rate management, and is the demand-side economic policy used by a country's government to achieve macroeconomic objectives such as inflation, consumption, productivity, and liquidity.

4. The balance of payments (BOP)- The balance of payments (BOP) is a representation of all transactions made over a given period of time between individuals in one country and the rest of the world, for example a quarter or a year.

5. Exchange rates between international currencies- An international currency exchange rate is the rate at which two currencies can be exchanged. International currency exchange rates indicate how much can be traded for another currency in one unit of a currency.