Understanding Credit Control Methods in Banking
Methods of Credit Control
The central bank of a country has the responsibility of controlling the volume and direction of credit in the economy. Bank credit has become an important constituent of the money supply these days.
Broadly speaking, there are two types of methods for controlling credit:
1. Quantitative or General Methods
These methods seek to change the total quantity of credit in general. There are three in number:
- Changing the bank rate
- Open market operations
- Changing the cash reserve ratio
2.
Read MoreStrategic Value Creation and Performance Analysis
The Tools of Strategy Analysis
Strategy as a Quest for Value
Doing business is about creating value for customers and deriving profit for the organization from that value. Value creation happens through:
- Production: This involves transforming products that customers value less into products they value more. The transformation could be physical, such as assembling raw materials into a finished product.
- Commerce: This doesn’t change the product physically but changes its position in space (trade) and
Understanding Accounting Information Users and Plant Asset Depreciation
Accounting Information and its Users
Accounting information helps users make better financial decisions. Users of financial information may be both internal and external to the organization.
Internal Users (Primary Users)
Internal users of accounting information include:
- Management: For analyzing the organization’s performance and position and taking appropriate measures to improve the company’s results.
- Employees: For assessing the company’s profitability and its consequence on their future remuneration
Economics and Game Theory in Professional Sports
Class 3: Contest Theory
Simplest Base Setup: Two players, P1 and P2. The probability of P1 winning is P1 = E1 / (E1 + E2), where E = effort of player X. Both P1 and P2 probabilities add up to 1. Unless they put in the same effort, they will win half of the time. The utility function (U) for P1 is U1 = (P1 * V) – CE1, where V = value of winning, CE1 = cost of effort for P1. The effort level that will maximize utility for P1 is C = [E2 / (E1 + E2)2] * V and for P2 is C = [E1 / (E1 + E2)2] * V. Differential
Read MoreMultinational Corporations: Impact on the Global Economy
The Role and Impact of Multinational Corporations in the Global Economy
Role of Multinational Corporations in the Global Economy
- Economic Power: Transnational corporations (TNCs) play a significant role in the global economy, accounting for about one-fourth of global GDP and one-third of world exports. Their size and influence make them key players in international trade and investment.
- Global Value Chains: TNCs are central to global value chains (GVCs), which are networks of production that span across
Understanding the Welfare State: Challenges and Solutions
1. What Are the Three Fundamental Reasons for the Existence of the Welfare State?
The three fundamental reasons are:
- To assist the economically disadvantaged.
- To address market failures, such as private insurance and pension system inefficiencies.
- To support economic growth by investing in skills and facilitating risk-sharing, which allows people to take risks (like starting a business) with the assurance of a safety net.