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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.
Fiscal policy is the program of government’s with respect to the amount and composition of (i) expenditure: the purchase of commodities and services, and spending in the form of su
why does the price level not enter desire consumption, investment and net exports of the desired aggregate expenditure function in the keynesian cross model
Suppose a firm raises $23 million dollars by issuing debt at a cost of 6.1%, raises $14 million by issuing common stock at a cost of 8.6% and raises an additional $10 million by is
Ok, so the supply curve for goal in the U.S. is perfectly elastic, while the demand curve has the usual shape. In 2011, the U.S. used 1,003 million tons of coal at an average price
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When a hurricane or flood or a pandemic strikes a country, who is most likely to respond first?
Suppose that 70% of people who identify themselves as an "Independent" voter end up voting for a Republican candidate. What is the probability that out of 120 "independent" voters
A telemarketer makes six phone calls per hour and is able to make a sale on 30 percent of these contacts. During the next two hours, find: A) The probability of making exactly four
Suppose the consumption function is C = $500 billion + 0.55Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially
Q. Explain the classical motivation? The classical motivation: Consumers want to smooth their consumption over time. In good times, consumers know that it is a temporary stat
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