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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.
explain the terms abnormal profits and normal profits
How growth are improved living standards The two main benefits of growth are improved living standards and technological advancement. As an economy grows, the output of
Consider the case of cleaning up chemical contamination at an industrial site. The marginal benefits of additional cleanup are decreasing as the amount of cleanup increases. Howeve
Liberalisation and Changing Sources of FDI: European countries had been major sources of FDI inflows to India until 1990. However, their relative importance declined in the
What are economic growth and the growth rate? Economic grow: It rise in a country is real level of national output like measured through Gross Domestic Product (GDP). Wh
Do we get paid nominal or real wage?
if we impose any rule and regulation on clasical model like not expoit polutionso what is effect on factor of clasical model
What are long run and short run? Long run: It is the time period wherein all inputs cannot be fixed. Short run: It is the time period within which at least one in
Effects of consumption function.
Mathematical Presentation: Consider the utility function U = U(x 1 , x 2 ). Differentiating totally, we get the following: dU = U 1 dx 1 + U 2 dx 2 = 0 (as along the indiffe
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