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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.
Determine the Economic functions of money There are three functions of economics of money - A medium of exchange. - A unit of account - Store of value.
A grocery store manager would like to have an idea concerning the average amount milk the store sells per day. In a sample of 70 days, the average amount number of gallons sold was
Q. Why GDP is determined only by aggregate demand? Note that we haven't said anything about the aggregate supply so far. In order to justify why GDP is determined only by aggre
Aggregate demand and Say's Law Y D = Y S in the classical model (Say's law) Aggregate demand Y D is defined as quantity of nationally produced
There are many ways to measure the national income. a) List at least 5 of themk question #Minimum 100 words accepted#
suppose c=a+by and investmentI is given.assuming mpc=.80 and I=50,find static and dynamic moel question #Minimum 100 words accepted#
define production function output effect?
Compare Money with wealth and income Money isn't the same as wealth. An individual may be very wealthy however have no money (for instance by owning stocks and real estate). An
An increase in growth rates will cause the production possibilities curve to a. shift inward. b. become steeper. c. become flatter. d. shift outward.
Consider a market where supply and demand are given by QXS = -12 + PX and QXd = 78 - 2PX. Suppose the government imposes a price floor of $35, and agrees to purchase any and all un
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