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Those economists who believe that monetary policy is more potent than fiscal policy argue that the: A) Responsiveness of money demand to the interest rate is large. B) Responsive
Marginal Propensity to consume or known as (MPC) relates to a change in net or total consumption expenditure to a change in the total disposable income. Symbolically it is writt
1. Assume the required reserve-deposit ratio is 12%, and the currency-deposit ratio is 38%. How much would money supply change if the Fed made open market purchases of $100 millio
Money is anything which is acceptable in settlement of a debt. But, paradoxically, the main asset used to settle debts in modern economies is other debts. After all, bank deposits
Because discretionary Income = the money people have left over once they have paid for all of their basic needs (Food, Clothing, Shelter). You could also call it Disposable Inc
Q. Show the Destruction of capital? Destruction of capital, for instance, through a war, works in the opposite way. Marginal product of labor falls, GDP per capita falls and po
Whenever real GDP declines, nominal GDP must also decline
Would it be more efficient if more firms could produce Vista? Would Microsoft have spent the money to develop Vista if it didn't hold a patent--that is, if once it developed Vista,
Functions of Money During the course of history money has taken various forms. In fact, there is no difficulty in identifying money but the problem is defining money. Economis
Factors Responsible for changes in Aggregate Supply We know that changes in input costs such as wages, oil and other input prices will cause changes in aggregate supply. Most
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