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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.
If the indifference curves are straight lines with slope s, and the budget constraint is given by: x*p1+y*p2 = m, then describe the optimal choice of the consumer.
Why are the imports subtracted when GDP is measured in expenditure approach? If you woke up in the working & found that nominal GDP has doubled overnight. what statistic wou
uses of national income statistics
The World Trade Organization is a successor organization to the A.United Nations. B.World Bank. C.International Court of Justice. D. GATT.
Discuss what policy changes he might be likely to propose with respect the issue that you identified as one about which he might be concerned.
Q. Determination of variables in AS-AD model? Once Y and P are determined, all other endogenous variables would be determined as well. Interest rate is determined by money mark
Inflation (RPI) - another imperative channel. Oil is a necessity for the UK, and is price inelastic therefore one can analyse the correlation between a price shock and inflation. I
An advantage of observing statistics from this range is that it encapsulates both positive and negative performances of the economy helping to produce a much more accurate insight
how large money is supply (M1)
Determine the Long-term direct investment flows Long-term direct investment flows are when investors buy physical assets like land or capital equipment in another nation. This
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