Central Bank Economy

But only if the economy is easy. Once a crisis occurs on a national scale, international investors are hastily leaving the economy of this state regardless of any rate. This leads to a reduction in demand in the domestic product and labor markets. Declining revenues, not only households but also businesses. Securities of domestic enterprises confidently impaired, the budget deficit beyond the planned values, means media is not trumpeting tar on the financial crisis. Who would invest in such an economy? International investors from such foolishness uniquely abstain. They did not show a drawdown, the investors they are not understand.

In this situation, the state can count only on themselves and their citizens. But all people are free money from banks and are already involved in trafficking. Additionally, the population will not get anything. Public money too, all painted on a budget. Increase in direct government spending is fraught with even greater increase in the budget deficit and the likelihood of hyperinflation. Not a solution either. 'And we let people give money under the percentage of the condition that they will be spent inside the country '- roughly the thoughts begin to emerge in the bright minds of the financial elite of the country, somewhere in the bowels of a national bank in the country.

In this case, the total amount of loans could easily exceed the one that brought international investors from the country. The Central Bank may issue any amount of money, so the only limitation here is the reluctance of people and businesses to borrow. For credit is necessary to pay, and the old rates too high for the borrowers. Naturally Central Bank begins to gradually reduce the official rate until such time has not yet come to such a level, and when households and businesses becomes profitable to borrow. Further, the situation is developing according to plan. Halyavskie people invest money in real estate, buy new cars, boats and other durable goods. In general, in what does not denied. Their expenses are business income, business expenses are income households and other enterprises. And so it goes in a spiral. And even at each turn of the state removes the cream in the form of taxes and uses them in his own country without risking to go beyond the normative value of the budget deficit. In less than six months as the economy going again on the rise. And international investors are re-united gang flee to invest there funds of its depositors, thus showing an increased demand for the currency. Below are the latest illustration of the proper operation of the Central Bank of Australia, and a chronology of the financial crisis of 2008. Until crisis rate for a long time kept at the level of 7,25%. As soon as the first signs of crisis, the Central Bank of Australia immediately began lowering the rate. As a result, the Australian dollar has returned to pre-crisis value, and value bets was 3% Dependence is evident – the rate cuts during the recession has led to good growth in the economy generally and the Australian dollar in particular.