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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.
In real life, the operation of simple multiplier is affected by many leakages. Leakages in the multiplier arise out of the following reasons: (1) Saving: If all the income is sp
Sally's Silk Screning produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event its
Explain the concept of elasticity and describe why the supply of petrol in the short run is relatively inelastic.
Explain the notion of the hidden momentum of population growth. Why is this an important concept for projecting future population trends in different developing nations?
If the firm‘s lowest average cost is $52 and the corresponding average variable cost is $26, what does it pay a perfectly competitive firm to do if • The market price is $51?
"No point is better accepted than the fact that the monopoly price is higher and the output smaller than what is socially ideal. The public is the victim." (a) Explain between
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 th
What is the price elasticity of demand? It is the Defining and Measuring Elasticity. The price elasticity of demand is the ratio of the percent modification into the quantit
distnguish betweenNational income at market price and National Income at factor cost, explain the importance of the distinction
Expenditures and the Effects of Fiscal Policy are stated as follows: Having finished the discussion on the tax policy and taxation, now let’s us focus on expenditures and the e
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