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General and Selective Credit Control
These are imposed with the full apparatus of the law or informally using specific instructions to banks and other institutions. For instance, the central bank can dictate a ceiling value to the amount of deposits the bank can create. This is more effective in controlling bank lending than the cash and liquidity ratio. It can also encourage banks to lend more to a certain sector of the economy (e.g. agriculture) than in another (estate building). Selective controls are especially useful in less developed investment away from less important sectors such as the construction of buildings, the commercial sector, or speculative purchase of land, towards more important areas.
Disadvantages of Barter Trade It is impossible to barter unless A has what B wants, and A wants what B has. This is called double coincidence of wants and is difficult t
The Circular Flow of Income and Expenditure This is an economic model illustrating the flow of payments and receipts between domestic firms and domestic households. The househo
NATIONAL INCOME ACCOUNTING This refers to the measuring of the total flow of output (goods and services) and of the total flow of inputs (factors of production) that pass thro
Demand Function for Money In the Keynesian analysis , the demand for money is a function of the level of income and the rate of interest. According to Milton Friedman, the dema
Arc Elasticity Is the average elasticity between two given points on the curve, i.e. Because of the negative relationship between price and quantity demanded, pr
assumptions and limitations
Q. Construction of the causal model - regression analysis? The construction of an explanatory model is a crucial step in the regression analysis. It should be defined with refe
Q. Avoiding Surplus and Inadequate Production? Demand forecasting is essential for the new and old organisations. It is somewhat necessary if an organisation is engaged in larg
Development of Transportation and Marketing Facilitates: The expansion of an industry may expedite the development of transportation and marketing facilities that will decrease th
An optimum Population Countries are often described as under populated or overpopulated. From the economist's viewpoint these terms do not refer to the population density (i.
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