AIOU SOLVED ASSIGNMENT 1 CODE 463 AUTUMN 2016 BUSINESS INTRO
Aiou solved assignment 1 code 463 autumn 2016 about business introduction. It is complete aiou solved assignment 1 for B.com course code 463 for the semester autumn 2016. A man who want to start business, must has the knowledge about business that it may run for profit. So this solved assignment for code 463 will help the students. So students can find this solved assignment code 463 for autumn 2016 on google with the following searching:- aiou solved assignment 1 code 463 autumn 2016, solved assignment 1 code 463 autumn 2016, aiou code 463 solved assignment 1 autumn 2016, autumn 2016 aiou solved assignment 1 code 463, aiou solved assignment 1 code 463 spring 2017.
The first question of this solved assignment explains or discussed the types of economic system. The major qualities or characteristics of economic system are discussed here:-
An efficient financial system is fundamental to supporting Australia’s growth and productivity. An efficient system allocates Australia’s scarce financial and other resources for the greatest possible benefit to our economy, promoting a higher and more sustainable rate of productivity, and economic growth. The Inquiry is concerned with three distinct, but interrelated, forms of efficiency:-
• OPERATIONAL EFFICIENCY: — where financial products and services are delivered in a way that minimizes costs and maximizes value. This largely depends on how effectively firms deploy labour, capital and technology, and the regulations with which firms comply. Strong competition, both from new entrants and incumbents, encourages firms to innovate and increase operational efficiency to survive and prosper. This can be seen in the ongoing industry focus on deploying new technologies in the Australian financial system to improve the quality and reduce the cost of products and services. Good policy-making can also assist operational efficiency by providing a stable regulatory environment and well-designed regulation that takes into account its likely effect on industry.
• ALLOCATIVE EFFICIENCY:— where the financial system allocates financial resources to the most productive and valuable use. Central to achieving allocative efficiency is the ability of prices to adjust freely to give participants information about the value and risk of various financial products and services. Prices help allocate financial resources to productive uses. Prices also help allocate risks to those most willing and able to bear them, such as through insurance or derivative contracts. For prices to play this role, market participants require access to comprehensive information about the risks and expected returns of financial products. Allocative efficiency can be hampered by ineffective disclosure, government guarantees (explicit or implicit) and tax policies that distort price signals.
AUTUMN 2016 AIOU SOLVED ASSIGNMENT 1 CODE 463
• DYNAMIC EFFICIENCY:— where the financial system delivers price signals that induce the optimal balance between consumption and saving (deferred consumption). At times, policy intervention may be required to overcome behavioral biases that impede an economy’s ability to allocate resources with dynamic efficiency. For example, Australia’s compulsory superannuation system was introduced, in part, to overcome the tendency of individuals to underestimate the value of deferred consumption for long periods, such as for retirement.
Resilience refers to the financial system’s capacity to adjust to both the normal business cycle and a severe economic shock. A resilient system does not preclude failure, nor necessarily imply price stability. Rather, a resilient system can adjust to changing circumstances while continuing to provide core economic functions, even during severe but plausible shocks. In a resilient system, individual institutions in distress should be resolvable with minimal costs to depositors, policy holders, taxpayers and the real economy.
Occasional episodes of financial instability are inherent in a market economy and are typically associated with asset price volatility, high levels of leverage, under pricing of risks and mismatches between assets and liabilities. History suggests that events of instability will continue to occur, but their timing, severity and causes cannot be reliably predicted.
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Although Australia’s experience of the global financial crisis (GFC) was not as acute as that of other countries — in part because of a strong Commonwealth fiscal position, effective monetary policy, ongoing demand for commodity exports and a prudent and well-managed financial system — Australia has not always been so well placed. Land and property speculation in the 1880s and 1890s led to an economy-wide depression, with real per capita GDP falling 20 per cent and around half of the Australian trading banks closing. During the 1930s depression, a number of financial institutions faced depositor runs.4 In the late 1980s and early 1990s, an unsustainable boom, primarily in the commercial property sector, combined with poor lending practices and associated loan defaults, resulted in aggregate bank losses equivalent to one-third of shareholders’ funds. This led to depositor runs on some institutions and was a contributing factor in Australia’s recession at that time.
Severe financial shocks have broad negative consequences, both for individuals and for the general economy. Depositors, policy holders, creditors and shareholders of affected institutions can lose money. Credit and risk management services may be scaled back. In extreme circumstances, payments mechanisms may break down. Confidence in the financial system can evaporate, causing contagion to spread from distressed institutions to the rest of the system. General economic growth slows, unemployment rises and standards of living fall.
COMPLETE AIOU CODE 463 SOLVED ASSIGNMENT 1 AUTUMN 2016