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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 is Money supply The monetary base is only a small part of the total money supply but, through the multiplier effect, the central bank's control over the money supply is ma
what is economic laws ans characteristics of economic laws?
In the heckscherohlin model, a decrease in the factors of production required to produce rice and beans would: a. shift the production possibilities frontier for rice and beans
What is Inherent Limitation?
Construct loanable funds market in the context of an open economy assuming that the home country is a small open economy. Discuss the effect of an enhance in the govt. expendi
Assuming that the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturity. Next, plot the resulting yield c
Identify and explain the evidence for and against the competitive model. Provide specific examples.
a) Use the arc-approximation formula to calculate the price-elasticity of demand coefficient of a firm's product demand between the (quantity, price) points of (100, $20) and (300,
What is the difference between merchantilism and absolute theory?
Suppose the own price elasticity of demand for good X is -5, its income elasticity is 2, its advertising elasticity is 4, and the cross-price elasticity of demand between it and go
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