Answers for Tutorial Questions due Week 12

Answers for Tutorial Questions due Week 12 - Answers for...

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Answers for Tutorial Questions due Week 12 15.1. Why are bank failures considered to have a greater effect on the economy than other types of business failures? Do you agree with this conclusion? Individual bank failures can hurt a community by shrinking the money supply and disrupting credit. Thus, commerce in the community suffers if other institutions cannot or do not move quickly to fill the void of money and credit left by a bank failure. If a banking panic occurs, the economy will slow down because bank reserves and the money supply will shrink abruptly unless the central bank quickly takes action to provide liquidity and restore confidence in the financial system. 15.5. What are the main pieces of regulation that influence the financial sector? Outline the role of each. The five key pieces of legislation that govern financial institutions include: 1. The Reserve Bank Act 1959 , which created the RBA and defines its constitution, powers and responsibilities. 2.
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This note was uploaded on 06/09/2009 for the course ACCOUNTING 1203AFE taught by Professor Ms.mirellamalin during the Three '08 term at Griffith.

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Answers for Tutorial Questions due Week 12 - Answers for...

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