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Direct control and Moral Suasion
Without actually using the above weapons, the central bank can attempt simply to use "moral suasion" to persuade the commercial banks to restrict credit when they wish to limit monetary expansion. Its effectiveness depends on the co-operation of the commercial banks.
Function of Money Markets The money markets are the place where money is "wholesaled". As such the supply of money and interest rate which are of significance to the whole ec
What is Normative economics It is concerned with varied corrective measures that a management undertakes under lots of circumstances. It deals with goal determination, goal dev
Determine the concepts of demand Demand always mentions to demand at price. The term 'demand' has no meaning unless it is related to price. For example, the statement, 'the
Fixed costs are those that are independent of output. They should be paid even if firm produces no output. They wouldn't change even if output changes. They remain fixed whether ou
Q. Show Normal profit equilibrium? Normal Profits: With the condition of MC = MR and MC cuts the MR from below, if E is the point of stable equilibrium, output of firm is OM
Q. Explain about Labour Economies? Labour Economies: As the size of output increases the firm enjoys labour economies because of (a) specialisation, (b) time-saving (c) autom
Now, let's modify our model a bit. Let's add a fourth sector of spending so that Y = C + I + G + X n with X = X o and M = M = f (Y). Will this change, by itself, increase, decrea
Define scarcity and opportunity cost. Show how these concepts are useful in managerial decision making
PER CAPITA INCOME AND INTERNATIONAL COMPARISONS Per capita income figures can also be used to compare the standards of living of different countries. Thus if the per capita in
Q. Loss at the point of equilibrium? Losses: At the point of equilibrium i.e. E where MR = MC, firm produces OM amount of the output. To produce this output, firm incurs an a
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