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Q. What do you mean by multiplier effect? Loans and deposits in banks give rise to a significant multiplier effect. We use a simple instance to explain this effect. Consider th
Q. What do you mean by Gross domestic product? Perhaps the most significant concept in macroeconomics is Gross Domestic Product (GDP): Gross Domestic Product (
Until recently you worked as an accountant, earning $30,000 annually. Then you inherited a piece of commercial real estate bringing in $12,000 in rent annually. You decided to leav
Using Simple Keynesian Model, discuss the effect of the following: a) An increase in govt. expenditure. b) A decrease in lump sum taxes. In this context compare the govt.
Do some research and find the inflation rate and the level of unemployment in the U.S. economy for the past 40 years. Is there a relationship between the two? If so, what type of r
What are the advantages of leaving resource allocation to price allocation? Ans) The 5 benefits are Neutral, Flexible, Freedom of choice, No administrative cost and lastly Dimin
What are long run and short run? Long run: It is the time period wherein all inputs cannot be fixed. Short run: It is the time period within which at least one in
Calculating interest rates on a yearly basis If maturity is different from one year, interest rate is generally recalculated to a corresponding one year rate. For instance con
How would the following influence the growth rates of theM1 and M2 money supply figures over time? a. an increase in the quantity of U.S. currency held overseas b. a shift of f
Wholesale Prices, Consumer Prices and Inflation From the man on the street to the highest policy makers, the behavior of prices is of intimate concern. Prices determine the pu
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