Give example of commercial banks how they create money, Macroeconomics

Assignment Help:

Give example of commercial banks how they create money

For example, the borrower uses the money to buy an apartment, the funds are transferred to the seller of the apartment. This will not affect the money supply - now it is the seller of the apartment that has a million available for consumption. If the seller uses the funds to repay the loan he got when he bought the apartment, the money supply will again decrease.

 


Related Discussions:- Give example of commercial banks how they create money

Medium run adjustment - economy adjustment, Suppose the economy is currentl...

Suppose the economy is currently in recession, and the exchange rate if fixed using the IS-LM model. a) Explain and illustrate the economy adjustment (in the medium run) b) E

Pigou effect, The Pigou effect: A) suggests that as prices fall and real...

The Pigou effect: A) suggests that as prices fall and real money balances rise, consumers should feel less wealthy and spend less. B) suggests that as prices fall and real mo

What would be due process require in circumstances, The Russ College of Eng...

The Russ College of Engineering and Technology of Ohio University announced in a press conference that it had found "rampant and flagrant plagiarism" in the theses of mechanical en

Impulse response functions, After an oil price shock was impacted upon the ...

After an oil price shock was impacted upon the other five variables in the model, many interesting results were found. I have already demonstrated that oil Granger causes i

Summary of the phillips curves, Summary of the Phillips curves In neo-c...

Summary of the Phillips curves In neo-classical synthesis, augmented Phillips curve is known as the short-run Phillips curve. It is presumed to be stable as long as expectation

What are the economic reasons for protectionism, Question 1: (a) What ...

Question 1: (a) What are the characteristics of market and command economies? (b) In a number of countries in recent years, there has been a movement towards a greater rel

Impact of property crime to increase, Which of the following will cause pro...

Which of the following will cause property crime to increase? a) An increase in jail terms. b) A decrease in personal incomes. c) An increase in the probability of arrest.

National income, briefly explain any five uses of national income statistic...

briefly explain any five uses of national income statistics

Profit-maximizing quantity, Aggregate supply Remember that labor demand...

Aggregate supply Remember that labor demand provides us profit-maximizing quantity of L for a given real wage. If W/P is given (as it's in cross model), we can find profit-maxi

Trade unions, discuss the effect that the activities of a trade union might...

discuss the effect that the activities of a trade union might have on an economy?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd