What is the role of insurance in an economy?The role of insurance in an economy is to compensate people from
losses. People who have insurance covers would not be coerced to
begin from scrape as they are compensated in the event of a
calamity.

What is The role of business in the economy?

Businesses create jobs. Business owners who hire employees pay thema wage, which they then spend. This process supports a strongeconomy.

The roles of insurance in the development of Nigeria economy?

The role of insurance companies in Nigeria can never be over emphasized, it is the pole of every successful business. The insurance companies have given Nigerians the faith to invest in business without fear of losing out. Most financial institution may not want to loan to individuals without them endorsing an insurance policy. The advent of insurance companies in Nigeria has greatly improved the development of the country in the area of finance, individual business and public welfare.

What is the role of commercial banks in an economy?

What is the Iimportance of Bank in the Economy? The role of banks in an economyWe all think we know what a bank is and what it does. And not without reason: most people have had practice of at least one bank, even if it is only throughhaving a salary account or withdrawing cash from an ATM. My aim in talking to you today about the role of banks in an economy is not tolecture you from high on banking theory. Albeit my objective is ordinary, it shows upalmost unattainable: to promote a slightly better understanding of what a bankcan do and what a bank should do. Before this question can be answered, we needto look at what banks actually do and how they do it. Here we are not in theoff the hook domain of bank employees and specialists. As we have seen over latestmonths, these matters can affect ordinary citizens and voters very quickly. At several stages before, during and after the campaign on the part of the federalgovernment, cantonal authorities and business community to save Switzerland’snational airline, the feeling was very much one of “it’s up to the banks to dosomething”. In letters to the press and in some articles, a excellent number ofcontradictory, confused and in many cases unrealistic hopes, accusations andexpectations were laid at the banks’ door. For example, the banks were criticised fornot stopping to recommend Swissair bonds to investors long before the crisisbroke, but at the same time they were pilloried for failing to grant far more creditto Swissair during the crisis. Contradictory reactions such as these areunderstandable up to a point. They are a measure of the shock, uncertainty andvulnerability experienced by many people in Switzerland, and not just the averageman in the street. As understandable as these reactions were from thepsychological perspective, however, they proved to be enormously unhelpful inpractice. Any “Bank of Joe Public” that would have attempted, even for a moment, to please the expectations held of it would not only have failed to save the airline; it would most most likely have faced bankruptcy itself, demolishing its clients’ deposits, employees’ jobs and owners’ capital in the process. Banks are widely held to be powerful and rich. This view is generally based on thevery accurate observation that banks deal with vast amounts of money. A quicklook at a bank’s balance sheet quickly puts this perception into perspective: incontrast to industrial companies, more than 90% of a bank’s balance sheet consistsof loans and deposits; the proportion of tangible assets such as buildings, machinery, etc. is minimal. What is generally most striking in a bank’s balancesheet, however, is that the (unweighted) portion of equity uncommonly exceeds 5%. Theproportion of borrowings is far higher. This is, of course, in the nature of thebusiness: banking means working with and managing outside capital entrusted toa bank by, for example, people like yourselves, the companies you work for or yourpension fund. Unlike the people who actually own this capital, banks have verylimited powers when it comes to determining what should be done with the money. Regardless of how individual aspects are structured, a bank’s business policy willalways have to be geared in equal part to the clients of that bank and its owners. Clients choose a bank because they trust it not to lose their money and becausethey expect a specific level of value added and are willing to pay fees andcommissions in come back. The same applies to the proprietor who makes his or her capitalavailable to the bank, thereby taking on certain risks and expecting to benefit frompart of the profit. A bank’s activities in all its divisions can basically be simplified as goes after: ittransfers money and information, and in doing so converts money, maturitiesand risks. In the rest of my speech, I intend to use the example of four lines of abank’s business to examine how it does this, the value added it creates, the risks itencounters and the confinements to which it is subject: (1) lending and depositbusiness, (Two) securities issuing, (Trio) asset management and (Four) foreign exchangetrading. Lending and deposit businessA bank’s role as an “intermediary” is clearest in the credit and deposit business. Clients “bring” to the bank their savings, i.e. the money they have chosen not tospend. The bank transfers this money to its credit clients in the form of loans. Whatis on the face of it enormously elementary is nevertheless fraught with a excellent many risks. A bank’s loans lack liquidity, either partially or totally. This means that the bankcannot sell them in come back for request deposits or central bank funds whenever itlikes. On top of this, a borrower’s credit rating may switch during the life of a loan, thereby switching the value of the loan at that point in time, which reflects theinterest and amortisation payments expected in the future. Due to the lack of asecondary market, credits are mostly carried in balance sheets at their nominalvalue, with provisions and write-offs only being formed or effected if there are anyindications that the borrower may have trouble meeting payments or is actually inarrears. In some cases, credits may even become entirely worthless if borrowersbecome insolvent and bankrupt. On the other side of the balance sheet, a bank assures its creditors the nominalvalue of their deposits plus interest due, irrespective of the profit or otherwisemade in lending transactions. Furthermore, the amounts a bank owes are generallymore liquid than the amounts it is owed; in other words, creditors can call in theamounts the bank owes them more quickly than the bank can call in what is due toit from its borrowers. One of the banks’ fundamental roles in the economy is to “convert” maturities in this way at its own risk. This is part of the service it offersas intermediary and a form of risk management. Another function which the banks perform within an economy is rating andselecting the loans they finance. The supply of client deposits is limited; therequest for credit generally less so. This being the case, credits have to be subjectto a selection process. The reason why this selection process cannot be performedsolely via the price (or rate of interest) is that lending transactions are not the sameas cash transactions, where payment is provided instantaneously upon a product orservice being rendered. Instead, the borrower undertakes to make future paymentsof interest and principal. As a consequence, the bank cannot base itself solely onthe capability to pay as introduced at that particular point in time; it also has toattempt to make some sort of assessment with regard to the borrower’s capability topay in the future. Through their activities as “agent”, another essential function performed by thebanks is to reduce risks overall. A bank that uses deposits from a large number ofprivate households to finance loans to a large number of companies is leveragingthe advantages of diversification. Insofar as depositors take the decision towithdraw their funds independently of one another, the bank benefits from theLaw of Large Numbers , given that it is not anticipating a situation where alldepositors withdraw their savings at the same time. Diversification places a role inthe lending business, too, this time over a large number of companies and sectors: a proportion of individual risks is evened out on aggregate and the bank functionsin much the same way as an insurance company. As financial intermediaries, banks have a responsibility towards both theirborrowers and creditors. Their prime responsibility is that towards their creditors (Implementing Ordinance on Banks and Savings Banks, 1998; Swiss Federal Law onBanks and Savings Banks, Article Four.). Together with protecting the function andreputation of the banks, the main aim of the law on banks and savings banks is toprotect creditors. The Federal Banking Commission’s regulatory and supervisoryactivities are all geared primarily to this aim. There is no similar protection under public law for those who have been lent moneyby a bank. The rights of such borrowers are covered in particular by the privatecontract which they have entered into with the bank. Within such contracts, banksgenerally undertake to provide specific products or services. They also contract tofulfil their due diligence and fiduciary responsibilities towards their borrowers. There is no legal obligation upon a bank to grant a loan to its clients under certaincircumstances. Indeed, the banks could not possibly be subject to such an “obligation to contract”, and for an visible reason: it would be diametricallyopposed to the aim of protecting creditors. This said, there have been and there arestill banks which function mainly upon the principle of providing cheap loans orpermitting co-operative structures to become self-sufficient in loan provision. Someexamples of this are the Swiss cantonal banks founded in the 19th century, theRaiffeisen banks and community development banking in the United States. Securities issuingLoans account for only part of the long-term financing provided by the banks. While bank loans are often the only source of outside financing for many puny andmedium-sized enterprises, a substantial proportion of the capital raised by largercompanies comes from the issuing of securities. This is also reflected in overall assetstructures: banks hold around CHF 1,100 billion in bonds in their clients’ portfolios, compared to the client deposits of CHF 900 billion carried in the banks’ balancesheets. In a securities issue, a bank or group of banks generally agrees to underwrite theentire amount of the issue. The securities acquired in this way are then suggested forpublic subscription for the account and at the risk of the bank or banks involved. The risk that not all the securities will be placed with clients is carried by the bank. The issuer, for its part, has instantaneously available to it the entire proceeds from thetransaction, regardless of how successful the suggesting has been. For a bank to besuccessful with an suggesting, it has to be able to gauge market conditions correctlyat the time of the issue and has to have access to as broad a base of custodyaccount clients as possible, in order to place the securities with these clients. Securities issues are a volatile source of earnings, as we have seen over latestmonths with IPOs in particular. They can be lucrative, especially if they do not onlyinvolve the ordinary issuing of fixed-income paper but are structured around moresophisticated transactions in several currencies with the aim of, for example, financingan acquisition. In transactions such as these, the in-depth analysis and specialistskill a bank provides are critical. The universal banks active in the issuing sector face a entire range of potentialconflicts of interest, given that issues often involve various parties from within andoutside the bank and that these parties are not motivated by the same interests: the issuance unit is interested in the suggesting, securities trading is looking for highrevenues, asset management clients expect the bank to safeguard their interestsirrespective of its role in the issuing transaction, the lending unit may haveinformation on the issuer that is otherwise not in the public domain, etc. Defusingand controlling potential conflicts such as these places enormous requests on abank’s organisational structure, processes and compliance activities. Only when abank succeeds in controlling the potential conflicts and managing them on asemi-transparent basis can the different stakeholders involved be sure that theirlegitimate interests are equitably upheld. Asset managementAsset management covers a range of banking activities: portfolio management, investment advisory, securities trading and lending business (collateral loans, securities lending and borrowing). With a discretionary portfolio managementagreement, clients authorise a bank to undertake, for their account and at theirrisk, all the deeds it deems suitable within the framework of the normal assetmanagement activities of a bank. Clients expect their assets to be managedprofessionally and in their best interests. The bank contracts to exercise itsundertaking to the best of its skill and abilities, taking into account clients’ circumstances but acting as it sees fit within the scope outlined as part of theinvestment goals defined with the client. What is clear from this is that the singularly most significant factor in assetmanagement, independently of any law or regulation, is the trust a client has in hisor her bank. Our Association’s Portfolio Management Guidelines form part of theregulations which a bank must observe. These guidelines specify that a bank whichaccepts portfolio management agreements must have suitable professionalorganisational structures which are commensurate with the activities involved, thatconcentrations of risk must be avoided, that, where there are no instructions to thecontrary, the bank must invest in securities for which there is a ready market, etc. The asset management business places exacting requirements on banks andbankers in terms of the expertise and ethical issues involved. Under nocircumstances can a bank simply “do as it pleases” in the portfolios it manages forclients, nor should it be permitted to do so. Foreign exchange tradingThe last business I mentioned was foreign exchange trading, an activity which hasbeen unjustly attacked as “casino capitalism”. Various factors have given rise to thisperception. Very first, without a doubt the massive amounts traded in the foreignexchange markets every day. According to figures from the Swiss National Bank, forexample, in April 2001 foreign exchange trades in Switzerland alone amounted toCHF 121 billion each working day. (For the purposes of comparison, the globalfigure was USD 1,210 billion.) The vast majority of this trading takes place inbetweenfinancial intermediaries, the aim being to exploit even the slightest differencesinbetween exchange rates (arbitrage). Only a very puny proportion of these trades isused to finance foreign trade and hedge foreign currency positions. Furthermore, the fact that serious economic crises such as the one Argentina is experiencing atpresent are almost always currency crises may fuel suspicions that it is currencytraders with their speculative attacks that trigger such developments. In fact, the very opposite is true. Many people may fail to see the point of the vastamounts of arbitrage transactions, since they are not primarily used for financingpurposes. In reality, however, they underpin liquidity in the markets, thus helpingthem to function slickly. In less liquid markets, fresh information wouldinevitably lead to much greater volatility in rates. A distinction has to be made inthe case of protracted currency over- or undervaluations (in terms of interest ratesand purchasing power parity), which are a genuine problem, as they could result inthe misallocation of resources. The scope available to banksBut what is the actual function of a bank within an economy? By granting loans, processing payments, accepting deposits, carrying out investments, etc. it iscreating added value for its clients, employees, service providers and shareholders. In this, it is no different from any other company. The real difference lies in theextent of the potential harm were a bank to collapse: Then it would not only beemployees losing their jobs, shareholders losing their capital and clients theirprovider; clients could potentially lose their entire savings and financial assets. Thisexplains why banks are so intensely regulated and so rigorously monitored. Nevertheless, the economic benefits generated by a bank are basically no differentfrom the economic benefits generated by a doctor, teacher or train driver: byexercising, to the best of their skill and abilities, their specialist function incompetition with others, companies and their employees make their contributionto economic benefit. And their motivation need not be a selfless one. Pilots do notfly planes to generate economic benefit, just as bankers do not grant credits forany such selfless reasons. Economic utility is created as a “by-product” anywherewomen and guys function successfully, and this does not apply solely to their jobs. Even however a banker grants loans to many companies and sectors of theeconomy, this does not mean he can do their work or bear their responsibilities. The argument of economic goals and responsibility is generally seized on bypoliticians when it is a matter of re-distributing capital, risks, profits or costs. Albeit not stringently wrong, the economic responsibility argument has the majorpolitical advantage that it can be flexibly deployed for absolutely anything. You willlook long and hard – and most likely in vain – for any “handy” definition of a bank’seconomic responsibility that is at the same time general enough. Which is why mysuggestion is the following: bankers act responsibly when they ensure that theirhouse is in order and fight back the temptation to pass off poor financial spectacleas a contribution to the economy.

The role of equities market in a economy?

Role.
1. Distribution of financial resources to the most productive units i.e savings to viable investments..
Two. mobilize savings which could be left idle to profitable channels..
Trio. Enable companies to raise brief term and long term capital funds..
Four. Provision of investment advice to individuals through financial experts..
Five. Enable companies to make l.t and s.t investments and increase liquidity of shares..
6. Achieving real output in the economy by mobilizing capital for investment.

What are the roles of enterpreneurs in Nigerian economy?

enterpreneurs are very significant in developing Nigerian economy.some of their roles are1.they identify the consumers needs and wants and do everything possible to sate them.

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Role of rivers in economy?

Rivers have been of fundamental importance in human history. Water from the rivers is a basic natural resource, essential for various human activities. Therefore, the sea banks have attracted settlers from ancient times. These settlements have now become big cities. Using rivers for irrigation, navigation, hydro-power generation is of special significance-particularly to a country likeIndia.

Role of banks in the economy of a country?

Role of BanksBanks serve as depository of idle funds. Individuals having excess funds deposit them in banks for the interest and services that they may obtain. The prospective depositors consider the total assets and the liquidity of the bank that they will choose. Banks serve as a major source of loandable funds. Deposits received by the bank are instantaneously lent out by the bank. This way the banks make money out of the other people’s money. Banks also give counsel in financial matters. Banks employ people who are experts on various fields, who can advise companies and businessmen on their financial problems. Advice may be in the form of financial or managerial know-how.

Role of money in an economy?

The role of money in an economy is very critical as money serves asthe backbone of the economy. The economy is actually measured usingthe monetary value of a nation’s currency and money is the mainmedium of exchange in all type of trade.

What is the role of rivers in Indian economy?

The role of rivers in the Indian economy is very ample. The riversform the main backbone for agriculture which is a main source ofincome for most families.

Role of rivers in indian economy?

The main role of rivers in the Indian economy was being a basicnatural resource. The are also essential in diluting andtransporting waste from settlements.

What is the role of government in a mixed economy?

To protect the public and to preserve private enterprise. ResponseTo be a little more specific, a Mixed Market Economy is one founded on Free Market principles, but which uses government regulation and monitoring to control certain “excesses” that True Free Market (TFM) system tends to express. That is, in a MME, the government is there to inject a sense of “societal good” concerning all market transactions. The idea is that while a TFM provides optimaleconomicefficiency, it makes no accommodations as to what effect that optimal economic efficiency has on the society as a entire, not just the entities engaged in the marketplace. That is, what iseconomicallymost efficient may not besociallymost efficient. Government regulation (i.e limitation on allowable economic activity) is the MME’s solution to this problem, where laws restrict certain behavior which has been deemed “bad” or “detrimental” to the society in questions. So, in a MME, the government’s primary functions are fourfold: .
Provide a stable currency for the TFM principles to be negotiated in .
Provide a dependable, independent, consistent legal/judicial system for the decent resolution of disputes arising from economic activity (in TFM terms, something to enforce contracts and resolve contract disputes) .
Produce a legal framework where a society can define what economic activity it considers acceptable behavior. .
Provide a legal enforcement mechanism to both detect violations of #Three, and to deter/penalize/reform entities from such violations (generally, using #Two). Various other powers may be ascribed to the government in a MME (such as social welfare programs, protection of the populace, etc.), but, stringently speaking, they are outside theeconomicscope being discussed here, and are more decently considered part of apoliticalsystem. Naturally, this boundary is fuzzy, for even if such programs are more decently part of a political system, they certainly have significant economic influence. E.g. if a political system chooses to have a public Universal Healthcare program, this directly impacts how medical services can be suggested (and how they are funded) in the country’s economy. Response .
eradicate poverty .
generate employment .
build good infrastructure .
enable education to all .
provide medical facilityReactionThere are three roles of a government in a mixed economy. .
Protection .
Regulation .
Public BenefitsReactionTo control market compels and to make sure that public goods are being produced. To help control and regulate the means of production.

What are the role of business and insurance in Nigerian economy?

THE ROLE INSURANCE IN NIGERIAN ECONOMY .
This sector represents the backbone of Nigeria’s risk management system, ensures financial security, serves as an significant component in the financial intermediation chain, and offers a ready source of long term capital for the infrastructure projects. The role of insurance in the growth and development of our economy cannot be over-emphasized.it mitigates the influence of risk and positively correlates to growth as entrepreneurs cover their exposures, otherwise risk-taking abilities are hampered. Thus, a strong and competitive insurance industry is a compelling imperative for Nigeria’s economic development and growth..
The Nigerian macro-economy overview is a compelling story of progression and advancement, attributably to a stable political environment and successful implementation of socio-economic and financial reforms. Tho’ Nigeria has previously been utterly dependent on Oil and Gas revenue, latest statistics showcase a switch in this trend. Militants unrest affecting oil producing region have resulted in significant reductions in oil contributions to GDP. On this roll side, enlargening concentrate on developing the non- oil sector, combined with growth in key sectors such as Telecoms and Building Construction have boosted non-oil sector earnings and growth..
As at Aug. 2005, prior to the announcement of the recapitalization directives, there were 22 insurance companies with a market capitalization ofN 28.94 billion listed on the Nigeria Stock Exchange. Now there are 26 active companies with a market capitalization ofN 683.1 billion, a Two,260% growth over two and half years,with fairly a few still expected to be listed this year..
The Nigerian Insurance Industry has evolved over the years following the announcement of fresh capitalization requirements for companies operating the sector. With the conclusion of the consolidation exercise, the number of players dropped from 103 to 49. Activities in the sector , however, noticeably enhanced; with enhanced public awareness of the sector and their operations, rapid expansions and strategic business acquisition, improved visibility and stringent supervisory regulations..
Therefore, in anticipation of the enormity of responsibility of the insurance sector, given the expected role in the transformation of the nation’s economy, the reform in the sector became unpreventable. One of the major outcomes of the consolidation and recapitalization exercise in the sector was the recertification of 49 companies, as against over 100 companies that were in existence in 2005. However, in spite of the reforms, the insurance sector is still faced with daunting challenges, which must be addressed to galvanize the economy..
The growth of this sector was on how effectively the insurers are able to come up with designs suitableto our context and howeffectively they are able to switch the perceptions of Nigerians and make them aware of the insurable risks. Thegrowthalso depended on how service -oriented insurers are going to be, and the effective ness of the regulation. In latest times, NICOM has taken the bold steps the release of trapped funding to the sector, in the verification and recertification of insurance firms, in ensuring that claims are better scrutinized and in guidance note as well as corporate governance..
The following functions were injected into the economy by the sector in order to better the lot of Nigerian Economy;.
a. Provision of indemnity/ compensation: as professional risk bearer that have entered into a contract of insurance with the insured that regularly pays his premium, it believes on the insurance company to indemnify if the insured peril occurs. When indemnified, it cushions the effect of loss suffered by the insured..
b. Reduction of losses: through the payment of indemnity, losses suffered are diminished, making it possible for the sufferer to commence again his business..
c. Distribution or sharing of financial loss: insurance operations enable loss or losses to be distributed among different contributors that mean insurers who normally pay their premium regularly. These insurer contributions or premium normally grow to form what is known as a “pool” of financial resources. If any insured peril occurs, compensation or indemnification is effected from this common pool. Payment made from this common pool indicates or infers that the loss has been distributed among the various premium payers. Infect, the loss cargo has been borne collectively..
d. Confidence in investment: insurance has directly stimulated investment in various fields of human endeavors. Any investor who remembers that he is going to be indemnified if the insured peril occurs will be willing and certain to put more funds in his business or even expand his business..
e. Provision of employment: normally, insurers and insured provide job opportunities to the citizenry. The insurance companies do employ extra mitts as their business increases, while investors who take insurance protections are certain to invest and or expand their business. By so doing they identically employ people to work for them..
f. Increase in investment: taking insurance polices to serve as boost to investors and entrepreneurs, various fields of business that are looked upon as very risky are being ventured into, meaning that with introduction of insurance many people are investing without fear of losing their capital..
g. Mobilization of financial resources: different participants in insurance business/ classes of insurance normally pay their consideration/ premium. These insurers mobilize these funds which they utilizes to indemnify losses. Some of these funds are usually invested in other variable businesses or companies. For example, the mobilized fund may be used to buy shares of a blue chip company, attracting dividend to the insurance company yearly..
h. Industrial growth and economic development: insurance business do stimulate entrepreneur to invest, expand, and diversify their various business. By so doing, they are contributing to the over all industrial, commercial and economic development of the nation.

What is the role of insurance in an economy?

What role does entrepreneurship play in the economy?

In the U.S economy entrepreneurs are businessmen; they create employment, pay taxes, most often than not they begin something fresh in the market, which stimulates the economy.

What is the Role of the government in the economy?

1. Foreign Relations – Diplomacy and DefenseTwo. Incubate special research, business and development, such as petite businesses, space research, job training, unemployment insurance and more. Trio. Protect and regulate the sustainable use of natural resources. Four. Enforce and regulate fair and responsible business practices. Included in this is monitoring monetary policy, providing consumer protection and regulating banking practices. Five. Determine and enforce civil laws of property and conduct. This includes the freedoms of the press, religion and rights of property. 6. Provide public goods and services for the well-being of the community as a entire, such as infrastructure, vaccination programs, disaster ease, fireworks shows, public parks, basic healthcare, subsidized housing, public education and public utilities. (These are things that the government provides better than private business for the community at large through pooling money and resources. There are more positive externalities for society when government provides public goods and services.)

Role of mnc’s in Indian economy?

MNC’s plays an significant role in boosting up Indian Economy. In support of this we can say, MNC’s bring foreign investors to India and hence helps in globalization of Indian Market. – – kammam – –

What role do entrepreneurs play in the economy?

Enterpreneurs are the risk takers, who take their own money (or borrowed money under which theyre liable) to invest in a business or idea. Without them, individual firms would not exist, in which case they would be run by the state (which is the ideology of a socialist system).

What was the role for the pharaoh in economy?

All things belonged to the Pharaoh and he taxed everyone. Since there wasn’t money in Egypt back then he taxed them with their time, items, and crops.

What is the Role of financial system in economy?

Financial system play a vital role in the development of an economy.Financial system act as an intermediery in the growth process taking place in an economy.It help in allocating the funds from non-function areas to functional areas such as collecting the resources from different persons in terms of saving and deposites and the same resoureces is being allocated to functinal areas such industrialist or agricultralist for better usage of resources which brings productivity as well as employment which help the economy to obtain growth in quicker rates.

What role does business play in our economy?

The role of business is large with the economy in the United States.A big role is generating jobs and income for citizens who in turnput earnings back into the system.

Role of rbi in Indian economy?

Role of RBI in Indian economy .
Issuer of currency – Except for issuing one rupee notes and coins, RBI is the foot authority for the issue of currency in India. The Indian government issues one rupee notes and coins. Major currency is in the form of RBI notes, such as notes in the denominations of two, five, ten, twenty, fifty, one hundred, five hundred, and one thousand. Earlier, notes of higher denominations were also issued. But, these notes were demonetized to discourage users from indulging in black-market operations. RBI has two departments – the Issue department and Banking department. The issue department is dedicated to issuing currency. All the currency issued is the monetary liability of RBI that is backed by assets of equal value held by this department. Assets consist of gold, coin, bullion, foreign securities, rupee coins, and the government�s rupee securities. The department acquires these assets whenever required by issuing currency. The conditions governing the composition of these assets determine the nature of the currency standard that prevails in India. The Banking department of RBI looks after the banking operations. It takes care of the currency in circulation and its withdrawal from circulation. Issuing fresh currency is known as expansion of currency and withdrawal of currency is known as spasm of currency. .
Banker to the Government – RBI acts as banker, both to the central government and state governments. It manages all the banking transactions of the government involving the receipt and payment of money. In addition, RBI remits exchange and performs other banking operations. RBI provides short-term credit to the central government. Such credit helps the government to meet any shortfalls in its receipts over its disbursements. RBI also provides brief term credit to state governments as advances. RBI also manages all fresh issues of government loans, servicing the government debt outstanding, and nurturing the market for government�s securities. RBI advises the government on banking and financial subjects, international finance, financing of five-year plans, mobilizing resources, and banking legislation. .
Managing Government Securities – Various financial institutions such as commercial banks are required by law to invest specified minimum proportions of their total assets/liabilities in government securities. RBI administers these investments of institutions. The other responsibilities of RBI regarding these securities are to ensure – .
Slick functioning of the market .
Readily available to potential buyers .
Lightly available in large numbers .
Undisturbed maturity-structure of interest rates because of excess or deficit supply .
Not subject to quick and meaty fluctuations .
Reasonable liquidity of investments .
Good reception of the fresh issues of government loans .
Banker to Other Banks – The role of RBI as a banker to other banks is as goes after: .
Holds some of the cash reserves of banks .
Lends funds for brief period .
Provides centralized clearing and quick remittance facilitiesRBI has the authority to statutorily ensure that the scheduled commercial banks deposit a stipulated ratio of their total net liabilities. This ratio is known as cash reserve ratio [CRR]. However, banks can use these deposits to meet their makeshift requirements for interbank clearing as the maintenance of CRR is calculated based on the average balance over a period. .
Controller of Money Supply and Credit – In a planned economy, the central bank plays an significant role in controlling the paper currency system and inflationary tendency. RBI has to regulate the claims of contesting banks on money supply and credit. RBI also needs to meet the credit requirements of the rest of the banking system. RBI needs to ensure promotion of maximum output, and maintain price stability and a high rate of economic growth. To perform these functions effectively, RBI uses several control instruments such as – .
Open Market Operations .
Switches in statutory reserve requirements for banks .
Lending policies towards banks .
Control over interest rate structure .

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Statutory liquidity ration of banks .
Exchange Manager and Controller – RBI manages exchange control, and represents India as a member of the international Monetary Fund [IMF]. Exchange control was very first imposed on India in September 1939 when World War II began and proceeds till date. Exchange control was imposed on both receipts and payments of foreign exchange. According to foreign exchange regulations, all foreign exchange receipts, whether on account of export earnings, investment earnings, or capital receipts, whether of private or government accounts, must be sold to RBI either directly or through authorized dealers. Most commercial banks are authorized dealers of RBI. .
Publisher of Monetary Data and Other Data – RBI maintains and provides all essential banking and other economic data, formulating and critically evaluating the economic policies in India. In order to perform this function, RBI collects, collates and publishes data regularly. Users can avail this data in the weekly statements, the RBI monthly bulletin, annual report on currency and finance, and other periodic publications. .
Promotional Role of RBI – Promotion of commercial bankingPromotion of cooperative bankingPromotion of industrial financePromotion of export financePromotion of credit to weaker sectionsPromotion of credit ensuresPromotion of differential rate of interest schemePromotion of credit to priority sections including rural & agricultural sector…..

What is Role of entreprenuers in developing economies?

to come up with fresh ideas for buisness’ an help droplet growth and employment in doing so in the broader economy. Entrepreneurs are risk takers by nature, and its this ideology that is needed when time are raunchy, and to help kick commence the economy again.

What is the Role of Insurance in the Economy of Kenya?

The role of insurance in the economy of Kenya is to preventcatastrophic loses due to death, natural disasters, or unforeseencircumstances. Insurance also generates large amounts of income dueto its business model.

What is the Role of marketing in Indian economy?

Marketing’s Role In Indian Economy “Marketing’s role is to ensure the continuance in growth of economies and the individual’s standard of living” ( M.J.Baker, 1985). According to the statement given by M.J.Baker, Marketing plays a vital role in the economic growth of the country periodically and sustain individuals standard of living. Marketing Definition “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, suggesting, and exchanging products of value with others” (Philip Kotler). Basically human need is state of deprivation or neediness where the people require food, shelter, clothing, belonging, esteem to live up their life. These needs are not created by the society or either the marketers, it is the existing nature of human biology and human condition. Even tho’ the human needs of the people are few, their wants are many, this is because they are continuously shaped or reshaped by the social compels and their environment which include institutions, families, and business corporations. “Wants of the specific product” is the request of the people and their preparedness to buy them. Companies should not only measure how many people want to buy their product but also the people who are willing and able to buy it. This readiness should be created by the company. Here comes the Marketing principle how well the company sell their product and please the needs of the customer (Narayana Rao K.V.S.S) Market- “Consists of potential customers sharing a particular need or want who might be willing and able to engage in exchange to sate that need or want”(Philip Kotler). Marketer- “A Marketer is some one seeking one or more customers who might engage in an exchange of values”. Marketers are the one who influence requests on the product by making the product attractive, suitable, affordable, and lightly available to target consumers. People living in different societies or…

What is role of marketing in Indian economy?

Role of market in India :India’s growth story has significant implications for the capital market, which has grownsharply with respect to several parameters – amounts raised number of stock exchangesand other intermediaries, listed stocks, market capitalization, trading volumes andturnover, market instruments, investor population, issuer and intermediary profiles.The capital market consists primarily of the debt and equity markets. Historically, itcontributed significantly to mobilizing funds to meet public and private companies’financing requirements. The introduction of exchange-traded derivative instruments suchas options and futures has enabled investors to better hedge their positions and reducerisks.India’s debt and equity markets rose from 75 per cent in 1995 to 130 per cent of GDP in2005. But the growth relative to the US, Malaysia and South Korea remains low andlargely skewed, indicating immense latent potential. India’s debt markets comprisegovernment bonds and the corporate bond market (comprising PSUs, corporates,financial institutions and banks).India compares well with other emerging economies in terms of sophisticated marketdesign of equity spot and derivatives market, widespread retail participation and resilientliquidity.SEBI’s measures such as conformity of quarterly compliance reports, and companyvaluation on the lines of the Sarbanes-Oxley Act have enhanced corporate governance.But enforcement proceeds to be a problem because of limited trained staff andcompanies not being subjected to substantial fines or legal sanctions.Given the flourishing economy, large skilled labour force, reliable business community,continued reforms and greater global integration vindicated by the investment-graderatings of Moody’s and Fitch, the net cumulative portfolio flows from 2003-06 (bondsand equities) amounted to $35 billion.The number of foreign institutional investors registered with SEBI rose from none in1992-93 to 528 in 2000-01, to about 1,000 in 2006-07.India’s stock market rose five-fold since mid-2003 and outperformed world indices withreturns far outstripping other emerging markets, such as Mexico (52 per cent), Brazil (43 per cent) or GCC economies such as Kuwait (26 per cent) in FY-06In 2006, Indian companies raised more than $6 billion on the BSE, NSE and other regional stock exchanges. Buoyed by internal economic factors and foreign capital flows,Indian markets are globally competitive, even in terms of pricing, efficiency andliquidity. US sub prime crisis :The financial crisis facing the Wall Street is the worst since the Good Depression andwill have a major influence on the US and global economy. The ongoing global financialcrisis will have a ‘domino’ effect and spill over all aspects of the economy. Due to theWestern world’s messianic faith in the market coerces and deregulation, the marketfriendly governments have no choice but to step in.The top five investment banks in the US have ceased to exist in their previous forms.Bears Stearns was taken over some time ago. Fannie Mae and Freddie Mac arenationalised to prevent their collapse. Fannie and Freddie together underwrite half of thehome loans in the United States, and the sum involved is of $ Trio trillion-about dual theentire annual output of the British economy. This is the thickest rescue operation since thecredit crunch began. Lehman Brothers, an investment bank with a 158 year-old history,was announced bankrupt; Merrill Lynch, another Wall Street icon, chose to pre-empt asimilar fate by determining to sell to the Bank of America; and Goldman Sachs and MorganStanley have determined to convert themselves into ordinary deposit banks. AIG, theworld’s largest insurance company, has survived through the injection of funds worth $85 billion from the US Government. The question arises: why has this happened? Besides the cyclical crisis of capitalism, there are some latest factors which havecontributed towards this crisis. Under the so-called “innovative” treatment, financialinstitutions systematically underestimated risks during the boom in property prices,which makes such boom more prolonged. This relates to the shortsightedness of speculators and their unrestrained greed, and they, during the asset price boom, believedthat it would stay forever. This resulted in keeping the risk aspects at a minimum and thusresorting to more and more risk taking financial activities. Loans were made on the basis of collateral whose value was inflated by a bubble. And the collateral is now worth lessthan the loan. Credit was available up to utter value of the property which was assessed atinflated market prices. Credits were given in anticipation that rising property prices willcontinue. Under looming recession and uncertainty, to pay back their mortgage many of those who engaged in such an exercise are compelled to sell their houses, at a time when the banks are reluctant to lend and buyers would like to wait in the hope that property priceswill further come down. All these factors would lead to a further decline in property prices. Effect of the subprime crisis on India: Globalisation has ensured that the Indian economy and financial markets cannot stayinsulated from the present financial crisis in the developed economies.In the light of the fact that the Indian economy is linked to global markets through a fullfloat in current account ( trade and services) and partial float in capital account (debt andequity), we need to analyze the influence based on three critical factors: Availability of global liquidity; request for India investment and cost thereof and decreased consumer request affecting Indian exports.The concerted intervention by central banks of developed countries in injecting liquidityis expected to reduce the unwinding of India investments held by foreign entities, butfresh investment flows into India are in doubt.The influence of this will be three-fold: The element of GDP growth driven by off-shoreflows (along with abilities and technology) will be diluted; correction in the asset priceswhich were hitherto shoved by foreign investors and request for domestic liquidity putting pressure on interest rates .While the global financial system takes time to “nurse its wounds” leading to lowdemand for investments in emerging markets, the influence will be on the cost and relatedrisk premium. The influence will be felt both in the trade and capital account. Indian companies which had access to cheapforeign currency funds for financing their import and export will be the worst hit. Also, foreign funds (through debt and equity) will be available at giant premium and would be limited to blue-chip companies.The influence of which, again, will be three-fold: Diminished capacity expansion leading tosupply side pressure; enlargened interest expenses to affect corporate profitability andincreased request for domestic liquidity putting pressure on the interest rates.Consumer request in developed economies is certain to be hurt by the present crisis,leading to lower request for Indian goods and services, thus affecting the Indian exports.The influence of which, once again, will be three-fold: Export-oriented units will be theworst hit impacting employment; diminished exports will further widen the trade gap to put pressure on rupee exchange rate and intervention leading to sucking out liquidity and pressure on interest rates. The influence on the financial markets will be the following : Equity market willcontinue to remain in bearish mood with diminished off-shore flows, limited domesticappetite due to liquidity pressure and pressure on corporate earnings; while the inflationwould stay under control, enlargened request for domestic liquidity will shove interest rateshigher and we are likely to witness gradual rupee depreciation and depleted currencyreserves. Overall, while RBI would inject liquidity through CRR/SLR cuts, maintaininggrowth beyond 7% will be a fight.The banking sector will have the least influence as high interest rates, enhanced request for rupeeloansand diminished statutory reserves will lead to improved NIM while, on the other forearm, other income from cross-border business flows and distribution of investment products will take a hit.Banks with capabilities to generate low cost CASA and zero cost float funds will build up themost as revenues from financial intermediation will drive the banks’ profitability. Given the dependence on foreign funds and off-shore consumer request for the Indiagrowth story, India cannot wish away from the negative influence of the present globalfinancial crisis but should quickly concentrate on alternative remedial measures to limit damageand look in-wards to sustain growth! Role of capital market during the present crisis: In addition to resource allocation, capital markets also provided a medium forrisk management by permitting the diversification of risk in the economy. Thewell-functioning capital market improved information quality as it played amajor role in encouraging the adoption of stronger corporate governanceprinciples, thus supporting a trading environment, which is founded onintegrity.liquid markets make it possible to obtain financing for capital-intensiveprojects with long gestation periods..For a long time, the Indian market was considered too petite to warrant muchattention. However, this view has switched rapidly as vast amounts of international investment have poured into our markets over the last decade.The Indian market is no longer viewed as a static universe but as aconstantly evolving market providing attractive opportunities to the globalinvesting community.Now during the present financial crisis, we eyed how capital market stood stillas the symbol of better risk management practices adopted by the Indians.Tho’ we observed a big fall in the sensex and other stock marketindicators but that was all due to low confidence among the investors.Because balance sheet of most of the Indian companies listed in the sensexwere reflecting profit even then people kept on withdrawing money.While there was a funk in the capital market due to withdrawal by the FIIs,we witnessed Indian institutional investors like insurance and mutual funds coming for the rescue under SEBI guidelines so that the confidence of the investorsdoesn’t go low.SEBI also came up with various norms including more liberal policiesregarding participatory notes, restricting the exit from close ended mutualfunds etc. to boost the investment.While talking about currency crisis, the rupee kept on depreciating againstthe dollar mainly due to the withdrawals by FIIs. So , the capital market triedto attract FIIs once again. SEBI came up with many revolutionary reforms toattract the foreign investors so that the depreciation of rupee could be put tohault

What is the role of finance in an economy?

finance represents the funds in exchange of anything with value. It greatly affect the economy because finance is one of the factors to be considered in determining the level of an economy. Economy is said to be futile without finances.

What is the role of insurance in an economy?

What is the governments role in the US economy?

To regulate interstate commerce, and to transact international relations. .
Presently, the US Federal Government plays these roles in the US domestic economy: .
It regulates how trade is conducted Inbetween individual US States .
It regulates all trade inbetween the US and other sovereign nations .
Congress determines WHICH economic activities it wishes to restrict or forbid. .
The Independent Regulatory Agencies (EPA, FCC, et al.) are agencies which have been set up by Congressional law to monitor and enforce economic laws in their particular area of responsibility (e.g. Pollution, Radio Spectrum, etc.) .
The Federal Judiciary arbitrates disputes inbetween individuals, government entities, and/or fictional entities (corporations, unions, etc.) with regards to contract law, and as to compliance with regulatory rules. .
The Federal Reserve and Treasury department manage US Currency and the money supply (i.e. monetary policy) .
The IRS oversees the collection of Federal taxes .
Congress passes laws which spend taxes for a diversity of purposes, including many social welfare programs, economic incentive programs, and infrastructure projects. .
Congress provides for certain non-regulatory policing functions (border security, the FBI, US Marshalls, etc.) .
Congress appropriates money for the defense of the nation. The individual State governments perform similar duties (generally #Three through #9) inwards each state using state departments and agencies, which are generally paid for with taxes levied by the state government itself (tho’, also with some funding passed down from the Federal government).

What is the role of government in market economy?

ResponseA market economy is one that is traditionallyFREEfrom government interference, however it does require government assistance to function. This could be through facilitating privatized organizations through funds and R&D (Research & Development), deregulating the market and the rules of foreign trade or improving foreign relations in order to open up more opportunities for a prosperous economy. The government is permitted to be a PART of the market economy, and its institutions and organizations fall under the public sector of the market economy. ReactionThe phase “Market Economy” is inexact, as it covers a broad multiplicity of different forms of economic theory, which vary considerably on the role that government is to play. Generally speaking, there are two major forms of Market Economy which people are worried with: a True Free Market (sometimes just shortened to “Free Market”), and a Mixed Market. The TFM is a theoretical construct, as it has not proved possible to implement in the real world; rather, it exists as an ideal to be striven for, according to proponents. All existing Market economies are what economists call a Mixed Market Economy. Please see the various Related Questions for better discussion on the roles of governement in specific forms of Market economies.

Role of MNCs in Indian economy?

The role of Multi National Companies, otherwise known as MNC’s, inIndia include the empowerment of its labor force. These MNC’s alsocontribute to the government’s finances by means of taxes that areused to build more bridges, roads, public schools, and hospitals.

What is the role of business in economy?

Business keeps the money flowing. When somebody spends something at a business, the people working there have extra money to spend on something else, which gives the people at another business extra money to spend…etc. When theft occurs, people commence saving money, or don’t have extra money to spend, the economy slows down.

What is the role of SEBI in Indian economy?

SEBI is the primary governing/regulatory assets for the securities market in India. Alltransactionsin the securities market in india are governed & regulated by SEBI. The SEBI Governs the following1. Fresh Issues (Initial Public Suggesting or IPO) Two. Listing agreement of companies with Stock ExchangesTrio. Trading MechanismsFour. Investor ProtectionFive. Corporate disclosure by listed companies etc.

What is the governments role in the economy of a country?

to ensure a good and equitable of income and wealth, to invest in case of a recession in order to boost up the econom

What is the role of insurance advisor in insurance?

An insurance advisor, broker or agent are the same thing. Response: The role of an insurance advisor is to help you choose the right policy per your needs. He or she serves as the link inbetween a consumer looking for insurance and an insurance company. Their role also includes helping you assess your insurance needs and accomplish the formalities required to purchase an insurance policy. GEPL, which is essentially a stock broking company, also offers comprehensive insurance advisory service. The best part about their service is that it is totally bias-free and also include claims and settlement assistance.

Role of advertising in Indian economy?

If company advertises their product then, it affects economically to company as it is expensive. It incurs so many expenses. Thought advertisement is expensive, but it gives long term benefit to the company.

What is the role of agriculture in national economy?

Not as much as farmers and ranchers might like. Agriculture represents less than 4% of the US national gross domestic product. As such, agricultural products are frequently “suspended out to dry” in international trade negotiations. Farmers and ranchers represent less than 1% of the total US population, making them politically “expendable”.

Role of monetary policy in economy?

Monetary policies are implemented by the RBI.These are policies regardingtheinterest rates prevailing in the economy,it also deals with the reppo and reversereppo rates which determines the interest rates inbetween the RBI and the other state banks.The monetary policies are significant in a country as it brings the inflation and deflation rates in to eqilibrium,which is an significant factor for the development of any economy. For detailed Information please go through book on the topic “Monitory Economics”

What is the role of efcc on Nigeria’s economy?

Role of efcc The role of EFCC in Nigeria is to curb the menace of the corruption that constitutes the cog in the wheel of progress; protect national and foreign investments in the country; imbue the spirit of hard work in the citizenry and discourage ill gotten wealth; identify illegally acquired wealth and confiscate it; build an upright workforce in both public and private sectors of the economy and; contribute to the global war against financial crimes.The Commission is empowered to prevent, investigate, prosecute and penalise economic and financial crimes and is charged with the responsibility of enforcing the provisions of other laws and regulations relating to economic and financial crimes. Whilethe role of ICPC in Nigeria is to prohibit and prescribe penalty for corrupt practices and other related offences. Section 6 (a-f) of the ICPC Act 2000 sets out the duties of the Commission as paraphrased in the given link below. The EFCC will curb the menace of corruption that constitutes a clog in the wheel of progress; protect national and foreign investments in the country; imbue the spirit of hard work in the citizenry and discourage ill gotten wealth; identify illegally acquired wealth and confiscate it; build an upright workforce in both public and private sectors of the economy and; contribute to the global war against financial crimes.

What Role Does Oligopoly Play On The Economy?

A market predominated by a number of puny participants who are able to collectively exert control over supply and market and places.

What is the role of insurance in an economy?

What is farming’s role in Mexico’s economy?

Mexicans have found jobs in other indrusties, but farming is still significant to Mexico’s economy

What was women’s role in colonial economy?

they where the backbone of the econymy… they ran busnesses,provided education, and where nerses. they also played a major partin the government

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What are the roles of government in a market economy?

According to mainstream, modern economic theory, the role of the government is to permit markets to operate unless a failure occurs, at which point an intervention is warranted to improve social welfare.

What are the limitations to governments role in the economy?

Technically, there are no direct limitations. The government can dual the money supply, quadruple taxes, or even block international trade. The internal checks and balances comes from the bicameral system and the nature of multi-party politics. If one party suggests something absurd, like mentioned above, they can be balanced by the other party. Also there are outer institutions such as the Federal Reserve (there are 12 banks across the country in NY, SF, etc.) and the Treasury that also play roles in economic policy. Most policy is reactive rather than proactive, which means that it can take up to Two years to solve a problem, which is also a limitation.

What describes slavery’s role in the economy?

slavery was a luxury to the southern because they were to lazy to grow there own tobacco and cotton so they had the subs do it

What role did the immigrants play in the economy?

Immigrants take on jobs that people born in the country aregenerally not willing to do. This helps expand the economy.

What are the roles of money supply in the economy?

Money supply determines the value of money i.e. if there are a lot of money in an economy, the value decreases and the other way around. Therefore, money supply essential determines the price of a good (if the money is worth less, the prices go up …etc…) Hence, according to monetarists, money supply is the key ingredient of inflation (and deflation)

What is the role of puny business in the economy?

Massive. Puny businesses account for almost half of the jobs in themarket, and increase the number every year by thousands.

What is the role of insurance industry in Bangladesh economy?

The Roles Played by The Insurance for Our EconomyINTRODUCTIONInsurance is a written contract, taken with the insuring company that transfers the risk of loss to the insurer according to the terms of the contract. However, not all risks are insurable. If an insurance company would have difficulty calculating the likelihood that a loss would occur because of some risk, it is reluctant to insure against that risk. Risks of this type are generally called un insurable risks. TYPES OF INSURANCE• Home insurance• Health• Disability• Casualty• Life• Property• Liability• Credit• Insurance financing vehiclesINSURANCE FEATURES IN BANGLADESHThe insurance is a contract whereby the insurer will pay the insured (the person whom benefits would be paid to, or on the behalf of), if certain defined events occur. Subject to the “fortuity principle”, the event must be uncertain. The uncertainty can be either as to when the event will happen (i.e. in a life insurance policy, the time of the insured’s death is uncertain) or as to if it will happen at all (i.e. a fire insurance policy). • Insurance policies are sold without the policyholder even observing a copy of the contract. • The amounts exchanged by the insured and insurer are unequal and depend upon uncertain future events. • The insured is not required to pay the premiums, but the insurer is required to pay the benefits under the contract if the insured has paid the premiums and met certain other basic provisions. • Insurance are also governed by the principle of utmost good faith which requires both parties of the insurance contact to deal in good faith and in particular it imparts on the insured a duty to disclose all material facts which relate to the risk to be covered. THE INSURANCE CORPORATIONS ACT 1973The Insurance Corporations Act 1973 was amended in 1984 to permit insurance companies in the private sector to operate side by side with Sadharan Bima Corporation and Jiban Bima Corporation. The Insurance Corporations Amendment Act 1984 permitted floating of insurance companies, both life and general, in the private sector subject to certain limitations regarding business operations and reinsurance. The Act of 1984 made it a requirement for the private sector insurance companies to obtain 100% reinsurance protection from the Sadharan Bima Corporation. The confinement regarding business placement affected the interests of the private insurance companies in many ways. The confinements were considered not congenial to the development of private sector business in insurance. According to the fresh rules the capital and deposit requirements for formation of an insurance company are as goes after: Capital requirements: For life insurance Company – Tk 75 million, of which 40% shall be subscribed by the sponsors. For mutual life insurance company – Tk Ten million. For general insurance company – Tk 150 million, of which 40% shall be subscribed by the sponsors. For cooperative insurance society – Tk Ten million for life and Tk 20 million for general. Deposit requirements (in cash or in approved securities): For life insurance – Tk Four millionFor fire insurance – Tk Three millionFor marine insurance – Tk Trio millionFor miscellaneous insurance – Tk Three millionFor mutual insurance Company – Tk 1.Four millionFor cooperative insurance – Tk 1.Four millionFor general insurance – Tk 1 million for each classNumerous institutions, associations and professional groups work to promote the development of insurance business in Bangladesh. Prominent among them are the Bangladesh Insurance Association and Bangladesh insurance academy. Considerable attention has been faithful to evaluating the relationship inbetween economic growth and financial market deepening. Most of what we have learned relates to banking systems and securities markets – with insurance receiving only a passing mention. Yet, while insurance, banking, and securities markets are closely related, insurance fulfills somewhat different economic functions than do other financial services, and in turn requires particular conditions to flourish and to make a total economic contribution. Fortunately, in the past few years, several interesting lines of research have begun to map the specific contributions of insurance to the economic growth process as well as to the well-being of the poor. The evidence suggests that insurance contributes materially to economic growth by improving the investment climate and promoting a more efficient mix of activities than would be undertaken in the absence of risk management instruments. This contribution is magnified by the complementary development of banking and other financial systems. Empirical studies suggest that non life insurance contributes to growth in countries at many different levels of development. Life insurance makes a substantial contribution to growth mostly in wealthier countries, since life insurance is typically a smaller part of the total insurance market in low income countries. The relationship inbetween per capita income levels and insurance invasion is also strong in the switch roles direction – with rising income a strong driver of life insurance coverage. However, it is difficult to disentangle whether lower insurance consumption at lower income levels reflects diminished request for life insurance products or constraints on the supply side associated with powerless regulatory and supervisory environments and high costs of insurance provision. Of course, even if the data did not support a strong causal role for insurance as an engine of overall aggregate growth, there might be a strong case for insuring the poor on social welfare grounds that those at or below the poverty line are particularly vulnerable to catastrophic shocks to income and consumption. And indeed, it shows up that the gap inbetween the potential social value of insurance and the transactions costs of provision might be unusually broad for the poorest segment of society, which explains the growing interest in micro insurance on the part of non governmental organizations and philanthropic foundations, some of whom are partnering with commercial providers. Contributions of Insurance to Growth and Development Insurance serves a number of valuable economic functions that are largely distinct from other types of financial intermediaries. In order to highlight specifically the unique attributes of insurance, it is worth focusing on those services that are not provided by other financial services providers, excluding for example the contractual savings features of entire or universal life products. The indemnification and risk pooling properties of insurance facilitate commercial transactions and the provision of credit by mitigating losses as well as the measurement and management of non verifiable risk more generally. Typically insurance contracts involve petite periodic payments in come back for protection against uncertain, but potentially severe losses. Among other things, this income smoothing effect helps to avoid excessive and costly bankruptcies and facilitates lending to businesses. Most fundamentally, the availability of insurance enables risk adverse individuals and entrepreneurs to undertake higher risk, higher comeback activities than they would do in the absence of insurance, promoting higher productivity and growth. The management of risk is a fundamental aspect of entrepreneurial activity. Entrepreneurs manage the risk of accidental loss by weighing the costs and benefits of each alternative. In a structured risk management process, this involves: 1. Evaluating alternative technics for treating each loss exposure; Two. Treating each loss exposure; Three. Choosing the best alternative; andFour. Monitoring the results to refine the choices. In most cases, insurers need to form partnerships with governments, communities and non-governmental organizations (NGOs). NGOs may be able to identify opportunities and support initial research and community organizations may be able to provide a low cost means of distribution. But it also requires a shift in thinking. NGOs will need to understand that the primary motivation for commercial engagement is profit, and insurers will need to understand that, for NGOs it is about development. CONCLUSION: Developed countries have stronger rule of law, so insurance companies have to pay on claims. In developing countries with their weaker law enforcement, an insurance company can deny to pay and bribe the judge if the customer goes to court. Or the owners of the company can close it and run off with the money. We can say that Insurance must be developing our country and our economy.

What is the role of SEBI on Indian economy?

SEBI is the primary governing/regulatory bod for the securities market in India. All transactions in the securities market in india are governed & regulated by SEBI.

What is the role of inflation in economy?

In ordinary words, Inflation means price rise and erosion in value of money over a period of time. Simply said, it is the increase in prices of products. It doesn’t necessarily have to be a negative thing. It results in decline in value of goods over a period of time. Eg. A thing that might have costed Rs. Ten five years back would cost Rs. 15 now due to inflation. Hence, we end up paying more for the same thing (same quantity). Inflation is managed by the Central Bank of an economy via its monetary policy stance and interest rates.

What is the role of agricultural marketing in an economy?

this mechanism through which different agricultural goods like grains vegetables and fruits reach different places is known as agricultural marketing

What was the pharaoh’s role in war and economy?

He created thezintaha system of government much like todays Cabinet, in which secretaries helped him run the government. He did a lot in the economy. He stole money and used it to buy many many camels. He also proclaimed war on many countries like North Korea. He had a big role and was the most significant person ever. He once proclaimed war on economy and blamed the bad economy on war.

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