What means hot money?
Black money includes all funds earned through illegal activities and otherwise legal income that is not recorded for tax purposes. Black money income is usually received in cash from underground economic activities and as such is not taxed.
Why are hot money flows good?
Why can hot money be significant for the economy of a country? Hot money tends to be volatile – (1) it can amplify exchange rate movements which then affect components of AD including exports (2) it can also move out of the country quickly (“cold money!”) See the article : How do you get true wealth?.
What does hot money mean? Definition of hot money: investment funds intended for the highest short-term rate of return.
What do you mean by high powered money?
High-powered money is the responsibility of the country’s monetary authority. This is also called the monetary base and is created by the RBI. High-powered money includes currency (notes and coins), deposits with the government and reserves of commercial banks with the RBI. So, to summarize, money has a lot of power. H = C + R.
What is Ncert of high power money? High Power Money: The total liability of the country’s monetary authority, the RBI, is called the monetary base or high power money. To see also : What are the 5 principles of money management?.
What is the difference between money and high-powered money?
Therefore, high-powered money is the sum of money with the public, cash and coins, and the fund with the central bank. Therefore, the creation of money of great power is owed to the central bank. See the article : What is the smartest thing you can do with your money?. On the other hand, the money multiplier is obtained by dividing one by the reserve ratio.