Talk:Microeconomics/Archive 1

Barriers to entry

Should we add an article about "barriers to entry", or just leave it under the general spectrum of the other articles?

Sure, if you're got enough material for it, it could stand its own article. Make sure to check what else is out there, we have market power and I'm sure some other related material. If you do write it, make sure to cite your sources. - Taxman 02:26, May 10, 2005 (UTC)

The study of monopoly is important for microeconomics, especially given the fact that it can affect just ONE market, so the scope here is entirely appropiate. It's also a great example of a violation of the one fundamental assumption of competitive markets - the presence of many producers, suppliers. That being said, Barriers to Entry should be at least be casually mentioned as it relates to monopoly, but doesn't need to be fully explained within the article - Nuance13x 08:13, 10 May 2006 (UTC)B.A. (Economics)

Monopolistic pricing

In this section of the article the image titled "Monopoly_pricing.png" is actually inaccurate. The shaded area is classed as profit for the monopoly, while it's actually the producer surplus. Profit of this magnitude would only occur if the firm had zero costs (which we know is not true). To calculate profit we need to know the average total cost and plot the curve on the graph. Until then, this article is lacking. I'll try and dig up something to fix the problem (i am computer illiterate, so it might be a while  :)) Dupz 14:45, 16 October 2005 (UTC)

Length

This article is far too long and attempts to cover too many topics. I admit that I don't know how to break it up, but I'm listing it for cleanup. Melchoir 00:17, 19 November 2005 (UTC)

Well I can't see from the mess that is the page history who is responsible, but the pag is so long because it contains full copies of other pages such as Supply and demand and Tax. - Taxman ^Talk 20:59, 6 December 2005 (UTC)

Some of this could be moved to wikibooks- the microeconomics wikibook.... Wikibooks:User:Paul Lynch

Taxation

I don't think taxation is that important to the realm of microeconomics. Its impact on industry level markets should be addressed, but it's not an essential part of the topic (unless I slept through the Micro class on taxation, possible). Sections on topics like the "history of taxation" can go, especially when they are on other pages. I'll remove those soon unless someone objects.--Bkwillwm 19:29, 18 December 2005 (UTC)

Agreed, a lot of the stuff doesn't make sense (history, who pays, morality.) The types of taxes and comparative statics stuff should stay, however. Feinstein 16:17, 19 December 2005 (UTC)

Mass clean up

Ok, I am going to begin a mass clean up - starting with deletion of all the duplicated sh-t. Once I finish that, I am going to restructure this page into something sensible. This might take a few days. novacatz 16:56, 19 December 2005 (UTC)

Sigh. Well I cut down the article from a (whopping) 156k to less than 40k now (not a bad 1/2 hours work). Unfortuately, it looks like this article has no real content whatsoever. It is getting late, so I am not going to try and hunt down the source of the other text currently (but I strongly suspect it is copies as well). I will think of some way of doing a nice writeup-and-summary when I have a chance (still have a few days). novacatz 17:36, 19 December 2005 (UTC)

Much longer than Macroeconomics

See how different the page for Macroeconomics is: http://en.wikipedia.org/wiki/Macroeconomics Kmarinas86 22:25, 11 January 2006 (UTC) The microeconomics article is a cacophonyKmarinas86 22:44, 11 January 2006 (UTC) The article needs to first state the basic principles of microeconomics. And starting from those few priniciples, categorize the economic theories in relation to these fundamental prinicples.Kmarinas86

Why a stub?

How is this article a stub if it's so long?

There are several basics that need to be worked on. First is basic consumer theory (indifference curves and how these cause a response to income and price changes) and producer theory (isoquants(sp?) marginal cost, etc), and how they ALL I KNOW IS THAT THIS IS FOR AN ECONOMICS PAPER SO YAH.

Right now we have basically a dictionary with lots of terms, but no real link between them, because the underlying producer and consumer theory is missing. I mean, how can you possibly explain natural monopoly or factors of production adequately without a decent understanding of how producer theory works in the competitive state? I plan on working on these topics as I have time in the upcomming months, but I know that there are quite a few other people in wikipedia who know as much as I do on microeconomics topics. Jrincayc 15:27 Feb 28, 2003 (UTC)

Added Consumer theory. I will start working on Producer theory soon. By the way, if I any of the microeconomics articles are confusing or need more examples, feel free to comment in the talk page or in my talk page. Jrincayc 13:09 2 Jun 2003 (UTC)

removed the repeating "@" from the first post in this section and reversed the edit to that entry by 168.11.80.3 (talk) wherein the first sentence's argument was altered. jh0367 (talk) 18:56, 9 September 2009 (UTC)

Cleanup

This article is currently a mess, which is a shame. I have some interest in helping to give it an overhaul, but I am not particularly knowledgeable on the topic (though I was an econ major for a while in college). If anyone wants to lead the way, I'd be happy help out, e.g., by improving a particular section. dbtfz^talk 03:24, 5 March 2006 (UTC)

Rewrite

Cleanup? This needs a complete rewrite. radek 08:32, 6 March 2006 (UTC)

Specific Proposal for Rewrite - an Outline

1. Definition, relation to economics as a whole, contrast with macro

2. Maybe some historical perspective. Marginal revolution. Walras. Marshall. Point out micro's de-emphass after Keynes and its resurgence with the Cowles Commission.

3. Coverage (this is the hard one)

3A Consumer Theory
3B Producer Theory
3C Partial Equilibrium
 3Ca Perfect Competition
 3Cb Imperfect Competition
  3Cb1 Monopoly
  3Cb2 Duopoly
  3Cb3 Monopolistic Competition
3D General equilibrium
  A lot of stuff here, probably best to link to relevant articles.
3E Information economics
  3E1 Assymetric info
  3E2 Search models
3F Something about Social Choice Theory, Representative Consumers, all that stuff
3G relatedly, micro foundations for macro models

And then.... radek 08:49, 6 March 2006 (UTC)

Looks good to me, though I'm no expert. Might be a little overambitious for a single article, but we'll see. We should try to get the opinion of at least one other person who knows a lot about (micro)econ. I'll see if I can track such a Wikipedian down. dbtfz^talk 08:58, 6 March 2006 (UTC)

Requested feedback from User:Meelar, User:Mydogategodshat, User:Isomorphic, and User:Jrincayc. dbtfz^talk 09:15, 6 March 2006 (UTC)

The rewrite sounds reasonable. Jrincayc 03:11, 7 March 2006 (UTC)

A re-write would be good. The current version is all over the place. I especially like the idea of adding historical context. This is the main article for the entire subject of macroeconomics, so we should try to keep it high-level and introductory. Heavy theory can go in more specialized articles. And we need to explain terms, even basic ones. The current article talks about surplus, but doesn't explain what surplus IS in the economic sense. One other thing: utility is central to microeconomics even more than to macro. It needs to be explained or at least linked to as soon as the article gets into theory. Isomorphic 23:18, 12 March 2006 (UTC)

I agree with all of the above. An icky, icky, article as it stands. The Land 16:54, 8 May 2006 (UTC)

I have gone through with the Holy Red Pen. Much of the out-of-place verbiage was forked from other articles. Now only to improve the article as it stands. The Land 17:26, 8 May 2006 (UTC)

Unfortunatly the rewrite is still needed on this article as its still quite a mess. For now I will tag it as start if that's ok. Karina.l.k 16:37, 30 April 2007 (UTC)

Haider zaman from pakistn if in econ its not good to control prices how can we say that is econ is the study of mankind bcz for controling inflation i think we need to control the retail prices--119.152.247.209 (talk) 10:14, 24 September 2008 (UTC)

Thanks

i satisfy from this wikipedia bcz of its articles its not a website or encyclopedia it is a guide for a student i want to say thanks to the wikipedia thank u wikipedia Haider zaman from UOM —Preceding unsigned comment added by 119.152.247.209 (talk) 10:25, 24 September 2008 (UTC)

Bad links

The second link in "External links" on the bottom of the page is obsolete ([1]) – the whole domain seems closed down. I am new to editing so I didn't dare just take it down. Maybe someone more experienced knows what the standard procedure is. (TormodOtterJohansson (talk) 17:58, 31 March 2009 (UTC))

Abuse of Market Power

What constitutes "abuse of market power" by a monopoly? Clearly all monopolies have market power And they follow the same profit maximizing rules as fims in a perfectly competitive market sturcture. --Jgard5000 (talk) 18:41, 1 October 2009 (UTC)jgard5000 So when does the exercise of market power become abusive?

A question for people who watch this page

What, currently, is the most popular and/or authoritative textbook in economics, or microeconomics? Slrubenstein | Talk 16:17, 3 October 2008 (UTC)

Mas-Colell, Whinston, Green: Microeconomic Theory is the bible of the field. It's very technical though. 84.73.207.121 (talk) 21:58, 11 June 2011 (UTC)

economics

ordinal utility what is its definition,assumptions&limitation — Preceding unsigned comment added by 196.0.25.38 (talk) 13:47, 15 October 2011 (UTC)

oligopoly

dsds fsad adsa — Preceding unsigned comment added by 220.245.213.53 (talk) 11:43, 16 February 2012 (UTC)

Development

The article on macroeconomics has a section explaining the development of the field. Shouldnt this article have the same? — Preceding unsigned comment added by Lbertolotti (talk • contribs) 18:47, 14 October 2012 (UTC)

Some names that come to mind right now are: Cournot,Marshall,Walras,Coase,Stiglitz--Lbertolotti (talk) 19:44, 14 October 2012 (UTC)

I proposed doing a history of micro article at one point (http://en.wikipedia.org/wiki/Talk:History_of_economic_thought/Archive_3#Micro_fork). It looks like you are working along similar lines. Maybe add more on classical economic theory and general equilibrium?--Bkwillwm (talk) 06:05, 16 October 2012 (UTC)

Sure feel free to improve, I just tried to cover the usual stuff you find in micro books. Regarding classical economists point of view, I think that most of what they would have to say about micro is contained in the first book of Wealth of Nations:division of labour,real price, nominal price,wages,rent,profit. General equilibrium is a tricky subject, particurarly regarding mathematical proofs, so I think its rather hard to summarize on this page.--Lbertolotti (talk) 12:39, 17 October 2012 (UTC)

Also adding some pictures could make the page more appealing to the reader, like pictures of markets, money and goods for example--85.18.50.180 (talk) 12:58, 17 October 2012 (UTC)

Average total cost is a vague and ambiguous term

The term "average total cost" is vague and ambiguous. Does total cost mean the total cost of production? If so what is it averaged over? Does total cost refer to the cost to produce a single unit of output? If so why not just call it cost? And why not talk about the average cost to produce a unit of output?

What the article means is average cost =Total cost/quantity produced Lbertolotti (talk) 18:38, 17 March 2013 (UTC)

Relationship between price and quantity demanded

The statement is a bias in favor of unplanned economy. The set of choises just showes people buy what they can afford and price things at what they can afford. It is not necessarily the "happiest" set of choices. Both supply side and demand side could still be starving. — Preceding unsigned comment added by 69.3.117.129 (talk) 07:23, 12 February 2013 (UTC)

Sentece removed because it didnt make logical sense.Lbertolotti (talk) 18:37, 17 March 2013 (UTC)

Metric space?

In the Assumptions & Definitions section, it is stated (without explanation) that an actor's preferences are a metric space. However, as I understand both preferences and metric spaces, this seems to be incorrect. A metric space not only allows comparison between any two points, but it also has a "metric" that can associate a scalar magnitude to any point...e.g., with a metric space, you can not only say that "she prefers apples to oranges", but you can say "she prefers 1.6 apples to one orange" -- which may not necessarily be possible; as I understand it, this is the point of the distinction between "ordinal" and "cardinal" utility. 2601:9:3400:74:8541:A080:BAB0:70F5 (talk) 18:49, 16 May 2014 (UTC)

This page is very helpful. — Preceding unsigned comment added by 71.205.30.57 (talk) 01:16, 30 October 2014 (UTC)

Dr. Chen's comment on this article

Dr. Chen has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"Also considered is the elasticity of products within the market system": The elasticity is a concept in the general topic of demand analysis. It should not have equal importance as, e.g., "markets under asymmetric information" which is usually a chapter by itself in a standard microeconomics textbook. The section on "Behavioral economics" traces the history, but does not give a definition of behavioral economics, which should be defined as a new field of study at the intersection of psychology and economics, which takes robust insights from psychology experiments seriously and formalize it using the rigorous language of economics.

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

Dr. Chen has published scholarly research which seems to be relevant to this Wikipedia article:

• Reference 1: Goldfarb, Avi, et al. "Behavioral models of managerial decision-making." Marketing Letters 23.2 (2012): 405-421.

• Reference 2: Jeon, Grace YoungJoo, Yong-Mi Kim, and Yan Chen. "Re-examining price as a predictor of answer quality in an online Q&A site." Proceedings of the SIGCHI conference on human factors in computing systems. ACM, 2010.

• Reference 3: Chen, Yan, TECK‐HUA HO, and YONG‐MI KIM. "Knowledge market design: A field experiment at Google Answers." Journal of Public Economic Theory 12.4 (2010): 641-664.

ExpertIdeasBot (talk) 02:50, 30 October 2014 (UTC)

External links modified

Hello fellow Wikipedians,

I have just modified one external link on Microeconomics. Please take a moment to review my edit. If you have any questions, or need the bot to ignore the links, or the page altogether, please visit this simple FaQ for additional information. I made the following changes:

• Added archive https://web.archive.org/web/20120125171634/http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=7640 to http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=7640

When you have finished reviewing my changes, you may follow the instructions on the template below to fix any issues with the URLs.

This message was posted before February 2018. After February 2018, "External links modified" talk page sections are no longer generated or monitored by InternetArchiveBot. No special action is required regarding these talk page notices, other than regular verification using the archive tool instructions below. Editors have permission to delete these "External links modified" talk page sections if they want to de-clutter talk pages, but see the RfC before doing mass systematic removals. This message is updated dynamically through the template {{source check}} (last update: 5 June 2024).

• If you have discovered URLs which were erroneously considered dead by the bot, you can report them with this tool.
• If you found an error with any archives or the URLs themselves, you can fix them with this tool.

Cheers.—InternetArchiveBot (Report bug) 17:20, 10 June 2017 (UTC)

How banks impact the economy

How banks impact the economy SIMON JAMES Blogspot.com Registration Number: 254723294504 Date: 2nd March 2021   How banks impact the economy Introduction Banks play a vital role in the financial system and the economy. Banks can efficiently distribute funds from investors to borrowers, a key element in the financial system. They provide financial services and reduce the cost of gaining information about economic opportunities, savings, and borrowing. The financial services offered by banks improve the overall structure of the economy. The banking sector influences the economy by using the financial assets as leverage, holding assets, and regulating other banking agencies, while its actual value is just on paper. The banking sector's core activity is to keep financial assets, and they have also expanded to holding gold coins for the exchange of promissory notes. It diversifies the risks involved by developing investments and issuing loans that earn interest. The economy is boosted due to the implementations enacted to curb activities that may trigger an economic crisis. The Federal Deposit Insurance Corporation was created to curb the panic that banks experienced in the previous years when the regulations were limited. The clients trust the banks to keep their deposit and withdraw it when needed by the owner. Therefore, the banks must have enough money of at least 8% of their books value to avoid concurrent withdrawals that can lead to bankruptcy. All banks' functions follow governmental regulations to regulate the economy; they diversify the risks and give out loans on interest. Because the investment is diverse, it protects against loan defaulting and other unexpected risks which may sink the whole bank (Saunders, 2014). The banks regulate all the activities enacted by the government and therefore control the economy by reducing and mitigating all the activities that may cause an economic crisis. The Federal Deposit Insurance Corporation was created in 1933 to check the panics experienced by the banks in previous years. The banking sector is an essential structure for maintaining the public's trust and implementing regulations to create trust. Banking Regulations These forms of government regulation focus on maintaining specific requirements, limitations, and rules designed to create transparency in the market between the banking institutions, individuals, and corporations as they conduct business. The U.S. government enacted the Bank Secrecy Act and the USA Patriotic Act to curb money laundering and financing terrorist activities. As a result, several risk management standards were incorporated in the sector to eliminate the risks of transferring illegal money in and out of the economy through a complex web of transactions. All the banks seeking to establish subsidiaries must meet specific risk management standards due to the regulations. The Federal Reserve Board makes comprehensive reviews of the foreign banking agencies to ensure compliance with the anti-money laundering regulations. All banks must meet these standards to do any transactions with the American financial system. Roles of regulations in Risk Management Within Banks Risk management is essential in the banking sector because it ensures the bank's profitability and reliability. The regulators must maintain the safety and security of the financial system. Over the past few decades, the banking sector has developed with progressive and innovative trading technologies and sophisticated products. Apart from enhancing bank's major roles like promoting profitability and diversifying the risk, these advancements also raise fundamental bank risk management challenges. Bank risk management is considered weak in relation to the rapid changes in the markets; thus, bank risk management is becoming a significant concern for regulators and policymakers. Anti-money laundering policies and regulations play a vital role in promoting the integrity of the banking system. The rules in risk management include;  The Bank Secrecy Act (BSA), which is a crucial anti-money laundering law, was created in 1970 to control acts of money laundering and make sure that banks also discourage its enhancement by all means. They impose and implement several obligations that banks need to comply with while operating within America.  The USA Patriotic Act is a regulation enacted in 2001is to increase BSA's scope and operations by empowering law enforcement agencies to mitigate terrorism by monitoring financial crimes (Saunders, 2014). How Banks Work Banks operate by depositing funds or by borrowing in the money markets. Banks borrow from individuals, other financial institutions, and governments with surplus funds. They use the deposits and the borrowed funds from other institutions to make loans and purchase securities to increase their assets base. Banks then can issue these loans to businesses, individuals, other financial institutions, and the governments at an Interest rate that provides the price signals for the borrowers and other banks. The process of depositing money, issuing loans, and responding to the interest rate signals makes the banking system and channeling of funds more efficient. The savers range from individuals with a small amount of money or deposit certificates to a big corporation with millions of dollars in their savings. Banks can service an array of borrowers, from the individual taking a minimal amount of loan to significant corporations that finance multi-billion-dollar corporations. The bulk of banks' funding comes from deposits and savings, money market accounts, and certificates. The significant uses of the funds are in real estate and commercial or industrial loans. Banks are only One Type of Financial Institution Several new products and services have found their way into the new financial instruments and institutions. Currently, many other institutions offer financial intermediaries. They include savings institutions, established insurance companies, credit unions, mutual and pension funds, other finance companies, and real estate trusts. Figure 2: A pie chart showing financial intermediary asset market share for the year ending 2000

Source courtesy: Federal Reserve flow of Funds released Banks' assets have grown in recent decades in absolute terms; however, banks have tended to lose market share to even faster-growing intermediaries such as pension funds and mutual funds. Currently, banks still account for a significant percentage of over twenty-three of all the assets of different financial intermediaries at the end of the year 2000. Risk Management Standards created due to Anti-Money Laundering Regulations The American government enacted and implemented the Bank Secrecy Act and the USA Patriotic Act to control and mitigate money laundering and terrorism financing. The introduction of several risk management standards introduced in the banking sector managed to eliminate the risk of illegal transfer of money in and out of the economy via other complex and online transactions. The banks that seek to establish businesses have to meet risk management standards enacted in the regulations. The Federal Reserve Board makes a comprehensive review of the foreign banking agencies and ensures compliance with the anti-money laundering regulations. Figure 2: A graph showing bank regulatory capital risks from the year 1998 to 2000

Risks and their management in banking Bank risks are the potential loss incurred by banks due to their occurrence. The banking sector's critical risks include credit risk, risk of interest rate, market or liquidity risk, and operational risk. Credit risk affects potential bank borrowers who fail to meet the obligations per the agreed terms. Banks' exposure to credit risk by banks is the major source of banks' problems since they are derived from loans and off-balance-sheet activities, banking, and trading books (Saunders, 2014). Consequences of not adhering to the standards outlined by the Federal Reserve System The impact of ignoring the Federal Reserve System is a required standard of regulation. It is deemed the regulator that aids in oversight and supervision of the bank system by ensuring that banks and financial institutions comply and adhere to the anti-money laundering guidelines and policies (Kidwell et al.2016). The repercussions that encounter the financial institutions that fail to adhere to the set and outlined standards are deemed suspensions accompanied by revocation of charters and licenses. Additionally, the operations associated with legal action are always conducted and initiated to act against the unaccepted bank agencies, which are always regulated through fines or suspensions, thereby controlling their transactions. Banks and other financial institutions are always expected to meet the set and outlined standards that assure them of acquiring integrity and operational efficiency gained in the marketing sector. The regulatory system ensures that every stakeholder obtains the market confidence which is required in the market sector. Therefore, the regulations are always put in place to control the transaction between investors and bankers, leading to preventions of thefts and fraud actions within the marketing sectors.

	The regulatory body is also concerned with maintaining a stable market operation in the U.S.'s varying economic state level since it controls the transactions of the investors who involve themselves in the production of goods and services.  Most of the regulatory concerns are based on the guidelines and principles that act as the law that governs the financial transactions activities in the market economy systems, leading to the efficiency of the operations (Saunders,2014). The Federal Reserve board is always concerned with checking the foreign trade statistics that determine the international trade distribution by verifying transactions in the internal market; hence, to some extent, they control the trading operations between the trading partners. The regulatory body is aids in determining the nominal and real prices in the market sector; hence it can be used as a descriptive analysis in understanding the impacts of regulation in the global and asymmetric trade exposure.

The Graph is showing how Federal Reserve System has been controlling the Exchange Rate as a regulatory body. The simple Line Graph shows U.S. Dollar against Euro Exchange Rate.

Management considering the Unregulated Leverage and Liquidity Levels of Banks and financial institutions Bank management committees are always concerned with unregulated leverage activities and determining the liquidity levels of business market firms or production companies. Regulation is considered by most firms in the production and marketing activities would experience difficulty managing the prevailing unregulated leverage activities and levels of liquidity in accordance or effectively (Weber, Feltmate et al.2016). Subsequently, efficient mitigation that results from risks is mainly controlled by gathering financial information that collaborates with banks and the financial sector regulations. Therefore, the banks and financial institutions' managers are required to contribute a lot in regulating actions of scrutinizing the prevailing risks through establishments of the long-lasting solutions of the risks. Most of the company's managers are deemed not to engage themselves substantially in risky and illegal company's activities (Haini, 2019). Thus, it makes the banks and financial institutions form and draw assumptions that are always concerned with leverage that is employed as an indicator of systemic risk management. Provided that activities associated with leverage are considered to be accompanied by uncertainty which leads to liquidity fears. Consequentially, the banks' managers always prefer when the firms' regulation is deemed to be banking. Thus, abandon policies with those of the firms' managers encouraged to conduct regulative measures that enhance the global market's financial stability. Bank management is always in check of unregulated leverages and liquidities to improve economic growth. In the U.S., the financial institutions consider economic growth to measure the increased wages and improvement of living standards, which is deemed a measure of Gross Domestic Product that is regarded as accelerating the consumption of goods and services. The economy's growth symbolizes the reduction of the string of scarcity described as a condition of insufficient resources with unlimited needs (Al-Busaidi, & Al-Muharrami, 2020). Financial strategies' management stimulates economic growth since customers in the trading market involve the opportunity cost due to the best alternative decision when choosing the products and their prices in the market. Banking sectors act as the productivity-boosting factors by engaging the human and physical capital to determine the economic growth through high financial rates, thereby leading to productive activity. The central bank acts as an institution that provides incentive structures in the economy. Therefore, it determines the growth of the economy in many countries. Federal Reserve Board uses the regulatory measures to determine the consumer price index, mostly in urban areas in the U.S. This helps the business banks determine the average change when determining the monthly change and variation in the market price, hence influencing consumers' buying habits (Dinçer, & Hacioglu,2013). This forces Federal Reserve Board to enforce policies that may lower the interest rates to increase the consumer's demand by increasing the product's consumption rate by consumers in the market. In the U.S, consumers are considered to be determinants of the price of the products in the market; they are the target customers who demand the products in the market. The Graph show Commercial Industrial Loans against Monthly Seasonal Commercial and Industrial Loans.

The consumers' decision is used to determine inflation and deflation in the market since their confidence in the product dictates its price. Graph showing Consumer Index against the monthly frequencies.

Tools that are employed when managing the prevailing risks related to unregulated leverage and liquidity levels Banks and financial institutions always prefer to engage the tools that can be used to manage the prevailing risks related to unregulated leverage and Liquidity levels when handling numerous economic risks, which accompany experiences when managing the regulations considering transactions in the trading activities (Kidwell et al.2016). The available tools like redemption notices are always adopted to increase the ability to create favorable situations to control the prevailing risks. The general statements are considered essential since they provide relevant information to bank managers to acquire the cash required to pay redemption existing in the market sectors. Additionally, the swing pricing mechanism is employed to ensure that the first mover's preferred advantage is accomplished. As a result, the agency provides that the present investors are willing to support the market sectors' liquidity cost . The investors' preferred tools in measuring the prevailing risks of the management on the related unregulated leverage and liquidity levels also consider the inflation rate, which is accompanied by the significance of money growth. The financial institutions and banks consider the Federal Reserve Systems as regulators of the financial market economy by controlling the nominal and real prices; hence, they are deemed to consider the high inflation caused by the increase in the product's cost as a result of scarcity or increase in demand (Weber, Feltmate, et al.2016). Considering the state of the market, which acts as a measure of the country's economic level, the financial institutions are always concerned about inflation in the market, which is determined by the inflation indices by comparing their state during different periods of the market year. Inflation expectations are always conducted by determining the difference between the numerous yields of the nominal treasury securities and the inflation-adjusted treasury securities. The outcome measures the expected financial market average inflation rate, which is considered over ten years. The banking sector is always concerned with prioritizing the inflationary indices when determining the increase in price, which is always considered the primary influence of consumers' behaviors in the market. The forecasted inflation always aids the financial institutions in determining the regulatory measures which are supposed to be undertaken by the business companies when conducting transactions in the market sectors. The Federal Reserve is always concerned with the regulatory activities on how to control the Consumer payment choice, which is deemed to be the best way of controlling unregulated and leverage levels of both the investors and traders in the market economy. Mostly the banks and financial institutions are always determined to influence the availability of cash to the citizens, therefore, leads to the need for controlling the unregulated actions in the market sector (Haini, 2019). The Graph shows Business Loans against Monthly frequencies and Observation date.

The analysis indicates that a quarter of the cash transactions are primarily conducted on food purchase transactions. The resulting cash transactions may cause the rise of unaccepted cash, thereby leading to inappropriate financial practices.

Conclusion Generally, banks and financial institutions consider the federal reserve board when conducting the regulatory measures used to determine risk management roles. The regulations also believe the standard pertained to risk management and their significance when dealing with money laundering activities. The repercussions are highlighted in case a business company ignores the criteria outlined by the Federal Reserve body. The financial institutions through Federal Reserve System are also concerned with the management of unregulated leverage and liquidity levels by controlling the transactions in the market between the business company and both investors and customers in the market economy. The available tools that can be used to manage risk management are also involved in increasing efficiency in the market. Banking sectors use regulation to determine inflation, Gross Domestic Product, change in the nominal and real price wages. Eventually, it is concerned with lowering the interest rates, choosing the consumers' confidence in the market economy.

Reference Kidwell, D. S., Blackwell, D. W., Sias, R. W., & Whidbey, D. A. (2016). Financial institutions, markets, and money. John Wiley & Sons. Saunders, A. (2014). Financial institutions management. Macmillan Press. Weber, O., & Feltmate, B. (2016). Sustainable banking: Managing the social and environmental impact of financial institutions. University of Toronto Press. Haini, H. (2019). Examining the relationship between finance, institutions and economic growth: Evidence from the ASEAN economies. Economic Change and Restructuring, 1-24. Al-Busaidi, K. A., & Al-Muharrami, S. (2020). Beyond profitability: ICT investments and financial institutions performance measures in developing economies. Journal of Enterprise Information Management. Dinçer, H., & Hacioglu, Ü. (Eds.). (2013). Globalization of Financial Institutions: A Competitive Approach to Finance and Banking. Springer Science & Business Media.