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How much money can banks create?
Does this mean that banks can create an unlimited amount of money? The answer is no - that would require them to lend an unlimited amount of money and that is not possible.
Banks use deposits to create new loans but there is an important difference between deposits and loans. When individuals deposit money in a bank, they can withdraw the money whenever they like. A bank, on the other hand, has no right to cancel a loan and get their money back whenever they like. Banks therefore need reserves so that they can deal with large withdrawals. A bank with small reserves will therefore be less inclined to lend money.
Pucker Lemonade, Inc., is a small company that produces bottled lemonade. Pucker's fixed cost includes the monthly rental cost of the lemon-smashing machines, the bottling machines
farmer grows a bushel of wheat & sells it to a miller for Rs. 1.00. The miller turns the wheat into flour & then sells the flour to a baker for RS. 3.00. The baker uses the flour
if govtment face cost push inflation which policy govtment should take to control inflatoin?
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
Occurrence: It is found in a range of foods based on fruits. Presence of patulin in fruit juice is a indication that the juice was extracted from poor quality fruit which is undesi
what is the meaning of the statement ''money is not merely a veil or wrapper''?
Derive saving- investment recognize in the context of an open economy. From national income accounting shows that an enhance in taxes (whereas transfer unchanged) must imply a
How much do you have to deposit today in order to allow 5 annual withdrawals, beginning at the end of year 8, with the first withdrawal of $1000 with subsequent withdrawals decreas
if we impose any rule and regulation on clasical model like not expoit polutionso what is effect on factor of clasical model
iN BOTH CITIES, AN INCREASE IN INCOME COMBINED WITH EXPECTATIONS OF A STRONG MARKET SHIFTED DEMAND AND CAUSED PRICES TO RISE RAPLIDLY DURING THE MID-TO LATE 1980S. Illustrate with
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