Financial Institutions And The Economic Growth Of An Economy

Scenario Description Financial Institutions or banks are very important and valuable for the sake of the economic growth of an economy (Gup, 1999). Therefore, the government of almost every country of the world likes to execute their growth through the existence of financial institutions. Apart from the financial institutions, there is yet another thing that needed to be there in an economy known as Financial Markets (Gup, 2003). This assignment is a Financial Market based assignment in which different provisions and elements of the financial markets would have been acknowledged and analyzed. There are three different parts of the assignment which further bifurcated into different answers. Part-1: Forecasting of Interest Rate Theoretically, an interest rate is a rate at which the borrower is liable to pay interest specifically for the utilization of money. The interest rate is basically a percentage of principal that paid a certain amount of money on the money borrowed from the financial institutions. It is important for this part to choose a country for the operations, except the United States and Canada. China is selected for this analysis (Tradingeconomics.com, 2015). China, the economic giant of Asia has the highest amount of foreign reserves and ability to become the largest economy of the world by surpassing the United States. The interest rate of China from 2005 to 2015 is as follows China is one of those economies of the world that kept a high amount of interestShow MoreRelatedEssay on Mortgage Crisis on Money Supply1480 Words   |  6 Pagesmacro economic variables in the economy. The United States of America recorded a mortgage crisis since 2007. The financial sector issued out massive amounts of money to individuals to acquire homes. 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