Answer to Question #281328 in Finance for Robert

Question

The operation of financial markets is deemed complex in so many aspects. Financial markets often experience crashes or shocks in their operations. Explain the causes of crashes or shocks in the financial markets

Central Bank of Kenya is playing a vital role in the growth of Kenya’s economy by encouraging savings and investment, as well as helping local and international companies’ access cost-effective capital. Defend your answer

Answer 1

- The reasons are as follows: speculation, excessive amount of borrowed capital, interest rates and inflation, unstable political situation, changes in tax legislation, panic moods of investors.

- The central bank regulates the amount of money in the country with the help of soft and tight monetary policy: lowering rates and expanding investments and vice versa.