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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.
what are the types of exchange rate
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A company is considering two types of water heaters. The associated costs are shown below. The estimated annual cost of operation for oil heaters equals 365 x 41045/EF x Fuel Cost
Explain the multiplier effect with example Deposits and loans in banks give rise to an important multiplier effect. We use a simple example to illustrate this effect. Consider
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Q. Determine price level from the quantity theory of money? The price level The price level is determined from the quantity theory of money: P = (M.V)/Y
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