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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.
Q. AS-AD model with inflation? When we have inflation, both AD curve and AS curve will be gliding. 'The glide rate' of the AD curve is given by Π M whereas it is Π W that appli
Determine Why banks raise their interest rates A way to explain why banks raise their interest rates is as follows. With higher overnight interest rates, it is more expensive fo
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How will each of the following bases for hospital reimbursement affect the number of admissions, the average length of stay, the volume of services per day, and the unit cost of se
Consider a market where supply and demand are given by QXS = -18 + PX and QXd = 90 - 2PX. Suppose the government imposes a price floor of $41, and agrees to purchase any and all un
What are the Responsibilities of central banks Responsibilities include providing banking services to commercial banks and the government and regulating financial markets and i
The price of gasoline has recently come down as has the quantity. Show graphically and explain what might have caused this.
what is fiscal policy?
explain the effects of various injections and withdrawals and show the equilibrium in the circular flow
Differences between absolute advantage and comparative advantage? Ans) Absolute benefit and comparative benefit are two basic concepts to international trade. Under
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