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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.
casual factors of traditional business cycle and its effects on the sectors of the economy
Explain about economic cycle The economic cycle is a period of approximately 6 or 7 years in which the economy completes a cycle of downturn, recovery, recession, and boom. A p
ACCOUNTING SYSTEM-EXAMPLE Let us now introduce a complication. There are three firms in the production sector. The Fruit Extracts Company manufactures from raw fruit, fruit ext
draw a diagram that explains how interest rate sare determined in the keynesian macroeconomic model
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applicability of the lewis model in developing countries
Consumer Prices Index Two economic indices learnt at AS are the Consumer Prices Index (CPI) and the Retail Prices Index (RPI). Both are used to calculate the average price lev
Suppose the demand for bread is D(p), where dD/dp Illustrate equilibrium with price on the Y-axis and quantity on the X-axis in which the t > 0. Show the economic incidence
According to liquidity preference theory, an increase in the price level causes the interest rate to: a.decrease, which decreases the quantity of goods and services demanded. b.inc
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