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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.
How do you figure out the answer to this question: You are a student at a university. You pay $8,000 per year in tuition, $5,000 per year in living expenses, and $1,000 per year fo
Cost Reduction Positive measures to effect a lowering of costs include: reducing national insurance contributions (an ad valorem tax on employing labor);
Suppose the supply function for product X is given by Qsx = -50 + 0.5Px - 5Pz. A. How much of product X is produced when Px = $500 and Pz = $30? B. How much of product X is p
Over the past few years there has been much concern about falling housing prices, and some policy makers have argued that the government should put a floor under prices so that the
During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in terms of pr
A sudden decrease in the growth rate of GDP will cause a change in: A. planned investment spending. B. unplanned investment spending. C. both planned and unplanned investment spend
What is green GDP and How it is evaluated ?
Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent decision you made. It could be a decision as simple as whether to eat out or cook y
explain the terms abnormal profits and normal profits
Relate central banks with commercial banks In many countries, the central bank imposes reserve requirements. This means that commercial banks are obliged to hold a certain perc
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