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Q. What do you mean by multiplier effect?
Loans and deposits in banks give rise to a significant multiplier effect. We use a simple instance to explain this effect. Consider the bank K-bank with total deposits of 10,000 (millions or whatever). K-bank is aiming for a reserve ratio of 10% of deposits. At the instance it has lent 9,000 and has 1,000 in reserve - exactly meeting their desired reserve ratio.
Explain the law of diminishing marginal returns using the example of a factory which is currently running at half capacity and employs more staff
HOW MARRIAGE AFFECTS GDP
Control: In apples molded by Penicillium expansum, most of the patulin is confined to the region of damaged tissue and simply removing the lesions reduces the toxin by 90%, but i
Sims (1980) introduced an exciting and ground-breaking new framework which would prove to be extremely insightful for macroeconomic analysis. This is known as vector autoregression
The real interest rate Interest rates and inflation Suppose you have 1 million on 1st January 2008. A basket of goods and services similar to the CPI basket costs 100,000.
A hospital has contracted with and HMO to provide acute care impatient services for $1000 per day, subject to a 10% withhold. The proposed budget for inpatient services is based up
) Consider an economy where individuals live for 2 periods and have prefer- ences represented by ln(c) + ß ln(c') where c and c' represent consumption in the first and second perio
Why is GNP C+ I + G + (X- M)+ NR + NP. What is relationship between X - M and NR + NP
If in some country personal consumption expenditures in a specific year are $50 billion, purchases of stocks and bonds are $30 billion, net exports are $-10 billion, government pur
The AS-AD model with inflation When we remove assumption of constant prices to allow varying real wages. Resulting model was known as AS-AD model. Similarly we now remove the a
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