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Why rbi maintains forex reserves


why rbi maintains forex reserves

thankful to them for their contributions in our profession. Suggest a Topic page, and while the original comment had a lot of questions about the overall functioning of an economy, I thought Id take one question from it, and try and answer that in a post. The price of any product is largely determined by its demand and supply, and when you super impose the price curve and demand curve â the intersection is called the equilibrium price, and it is generally believed that prices will move towards this point and. But, this is simply not true any country can print as much money as they want, and they dont need to have any gold to back their currency. I see a great example of this with cell phone usage, as I have cousins of varying ages. If you used an air conditioner for just the night â you will now want to use it all the time. So, printing money is not the way to become rich â becoming competitive â producing cheaper goods, and facilitating exports are. Quantitative Easing, a term that became popular just after the recession. 1.20, but when the price shoots up.

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Your consumption / demand will generally increase with your income levels. More from my site. Thats fairly easy to do right? First, think of how demand of a product is related to its price. How is the price finally fixed? 2 â you will now demand 120 units. 1 â you will now demand 50 units.

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