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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.
Aggregate Supply and Demand 1. The equation for expenditure GDP is 2. Sketch a fully labeled aggregate supply and demand diagram for an economy that is in full employment equ
Company A owns a patent with 15 years of remaining life. Company B is paying royalties to Company A for a license to the patent. It is estimated that royalty payments (end-of- year
Explain why we cannot measure the national product simply by adding up the production of all firms. Why do the economists use real GDP rather than nominal GDP to gauge economic
Aggregate Consumption This is the aggregate of all expenditures on current consumption goods and services i.e. those which are consumed during the period. Living standards are
What do I calculate with quantity of each good produced, to find the Real GDP?
Suppose that you have bought a total of 3100 shares of stock of a particular company. You bought 1200 shares of stock at $17 per share, 900 shares of stock at $11 per share, and th
Explain the Economic functions of money - A unit of account In a monetary economy, all prices may be expressed in monetary units which everyone may relate to. Without money,
definition and charactoristics of index numbers.problems while constructing index numbers
GDP vs GNP in kenya
What are forms of price ceiling to lead inefficiency? Price ceilings frequently lead to inefficiency into the forms of: a. Ineffective allocation to consumers b. Wasted r
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