problem 1: The financial system is complex in structure and function all through the world. There are many different kinds of institutions: banks, insurance companies, mutual funds, stock and bond markets, and so on-all of which are regulated by the Government. The financial system channels billions of Rupees per year from savers to people with productive investment opportunities. If we take a close look at financial structure all over the world, we find out eight fundamental puzzles that require to be solved in order to understand how the financial system works.
Describe in details the eight fundamental puzzles which require to be solved in order to understand how the financial system works.
problem 2: Why is pegging the nominal interest rate problematic for the Central Bank?