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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.
What are the advantages of leaving resource allocation to price allocation? Ans) The 5 benefits are Neutral, Flexible, Freedom of choice, No administrative cost and lastly Dimin
A person chooses between leisure and consumption. All of their consumption comes from current income. The utility derived from any combination of leisure and consumption is given b
From the lower left graph of Fig. it can be seen that there is a time lag associated with an oil price shock and its subsequent effect on unemployment. The results show that for th
One alternative way to calculate the total change in money supply when the Fed injects money into the economy or takes away money from the economy is the amount of money injected o
Q. Simultaneous determination of Y in the IS-LM model? Simultaneous determination of Y and R in the IS-LM model By combining IS curve and LM curve, we can graphically e
when supply of money increase what happen r,y.I.c
What are the indicators of development? Economic development is a complicated multi-dimensional idea. Preferably each aspect of development needs its own indicator. • Prof
List the 3 factors that determine the price elasticity of demand? State the factor that determines the price elasticity of supply?
Differentiate between Actual and Potential output. Actual output is that level which economy in fact produces. In contrast, potential output is the aggregate capacity output o
How does the Ricardo Viner diagram react when once price changes, effects on real wages, and labor allocation?
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