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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.
If taxes and government expenditures were constant and did not vary with income, then: A. passive deficits would increase. B. structural deficits would increase. C. passive deficit
real gdp measures?
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definition of cheap money
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