Supporters of central banking argue that it provides stability to the economy and allows the government to influence important aspects of the economy. However, central banking detractors argue that central banking unnecessarily expands the size and influence of government and leaves the economy more susceptible to corruption.Know More
The pros of central banking are the establishment of a nationally recognized currency, the implementation of monetary policy and the ability to conduct independent audits. In the U.S., the Federal Reserve's primary method of implementing monetary policy is raising or lowering interest rate. Debate.org explains on their website that this allows the Fed to encourage borrowing and investment in a slow economy and control inflation. The Fed also audits member banks to ensure their financial health, a practice that without a central bank would be left to banks themselves. The cons of central banking include an expansion of government, limitations on the free market and the potential for corruption.
According to SubjectMoney.com, politicians and members of the public believe that a small government results in more freedom and that the concept of central banking is contrary to the core principles of capitalism because it takes control of some market forces away from the free market. Additionally, many of the people who work for central banks are former bankers, leading many to believe that central banks are highly susceptible to corruption and that central bankers do not always act in the best interest of the public.Learn more about Economics
Protectionism can promote the growth of burgeoning industries in developing countries, but it also leads to overall higher prices and reduced innovation. Government officials often implement measures of protectionism to assist the interests that keep them in office or to grow the public treasury. In general, all members of the global market benefit more from free-trade policies than from protectionism.Full Answer >
Some of the pros of capitalism include increased market efficiency and increased economic growth, while some of the cons include wealth inequality and lack of public services. Capitalism is an economic system in which the government exerts little influence, and private companies control the production of goods and services.Full Answer >
Advantages of exporting include increased sales, gaining global market shares, diversification, lower cost per unit and expansion within the company. Disadvantages include extra costs, the possibility of needing to change products, payment collection complications and difficulties in getting reliable market information.Full Answer >
Monopolies are often better-equipped to serve the public interest and compete internationally. They also have advantages in research and development and economies of scale. The primary problem with a monopoly is that it gives one company control and power of the marketing, which may lead to high customer costs.Full Answer >