- •2. What is the most efficient economic system? 2/How does the market operate?
- •3. Why is competition an important force of the market?
- •4. Are businesses today free in their policies?
- •III. 9. What does the notion “function policy” mean?
- •10. What is fiscal policy?
- •IV. 11. What are taxes?
- •12. What functions do taxes perform?
- •13. Are businesses taxed equally?
- •14. Which kind of taxation in the usa?
- •15. How is taxation levied in the uk?
- •V. 16. Corporate income tax.
- •17. Individual income tax: Indirect taxes. Excises.
- •3. Indirect taxes
- •18. Value added tax.
- •19. Social tax and Property tax.
- •VI. 20. What is the major sector of any modern monetary system?
- •21. What functions do central banks perform?
- •22. What kinds of the main instruments the nbk has been using?
- •23. What is the structure of the frs?
- •24. What functions and services does the “Fed” perform?
- •25. What services do banks offer?
- •27. What are the more recent developments in banking? Retail and wholesale banking.
- •28. In what ways are individuals affected by international monetary developments
- •29. What is the international monetary system?
- •30. What are the international monetary relations governed by? The major International monetary
- •Institutions.
- •IX. 31. How can financial market be classified?
- •32. What ways of raising capital are available for governments?
- •34. The history of emergency and growth of stock exchanges.
- •35. Where were best organized stock markets established?
- •36. What are the basic types of stock markets? How are they conducted?
IX. 31. How can financial market be classified?
People and organizations wanting to borrow money are brought together with those having surplus funds in the financial markets.
There are a great many different financial markets, each one consisting of many institutions, dealing with different instruments in terms of the instrument maturity’ and the assets backing it, and serving different types of customers.
Generally, financial ,markets are classified as money or capital markets and primary or secondary markets.
32. What ways of raising capital are available for governments?
Money markets deal in short-term securities having maturities of one year or less.
Capital markets deal in long-term securities having maturities greater than one year. An investor who purchases new securities is participating in a primary financial market. An investor who resells existing securities is participating in a secondary financial market.
So, when businesses, units of government or individuals cannot satisfy their needs for funds by revenue from sales of goods and services, they can turn to either debt financing (any process by which the firm gets cash or some other assets in return for a promise to pay an agreed upon sum plus interest) or equity financing (any process by which a firm raises funds in return for a share in its ownership and management).
Some sources of funds available to businesses (like issuing stock) are not available to governments. When revenues fall short of expenditures2 governments go into debt3 – they borrow short- and long – term funds by issuing bonds. 33. What is a bond. Global bond market (the internal and external bond markets).
A bond is an instrument in which the issuer (debtor/borrower) promises to repay to the lender/ investor the amount borrowed plus interest over some specified period of time. It should be stressed that one of the most important characteristics of a bond is the nature of its issuer. Issuers include federal (central) governments and their agencies, supranational (such as the World Bank, the Asian Development Bank), municipal governments, nonfinancial and financial corporations.
By far the largest issuers are central governments.
There is no uniform system for classifying the global bond markets. Quite a number of financiers consider it appropriate to use the following classification. From the perspective of a given country, the global bond market can be classified into two markets: an internal bond market and an external bond market. The internal bind market is also called the national bond market. It can be decomposed into two parts: the domestic bond market and the foreign bond market.
The domestic bond market is where issuers domiciled in the country issue bonds and where those bonds are subsequently traded. The foreign bond market of a country is where bonds of issuers not domiciled in the country are issued and traded.
Bonds traded I the US foreign bond market are nicknamed Yankee bonds. In Japan, foreign bonds issued by non – Japanese entities are nicknamed Samurai bonds. Foreign bonds in the United Kingdom are nicknamed bulldog bonds, in the Netherlands – Rembrandt bonds and in Spain – matador bonds.
The external bond market, also called the international bond market, includes bonds with several distinguishing features: 1) they are underwritten by an international syndicate, 2) at issue they are offered simultaneously to investors in a number of countries, 3) they are issued outside the jurisdiction of any single country, and 4) they are in unregistered form.