The dual nature of financial markets in developing countries-traditional and modern-implies that central banks in developing countries:
A)play essentially the same role as they do in developed economies.
B)find it more difficult to conduct monetary policy than central banks in developed economies.
C)find it easier to conduct monetary policy than central banks in developed economies.
D)have effectively no role to play in the conduct of monetary policy.

Question

Quizplus · Accepted Answer

The dual nature of financial markets in developing countries, comprising both traditional and modern sectors, complicates the task of central banks in these countries. They have to navigate and influence a more complex and less integrated financial landscape compared to their counterparts in developed economies, making the conduct of monetary policy more challenging.

The Dual Nature of Financial Markets in Developing Countries-Traditional and Modern-Implies