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Cost Reduction
Positive measures to effect a lowering of costs include:
reducing national insurance contributions (an ad valorem tax on employing labor);
improving the supply and quality of labor, e.g. by developing training schemes, encouraging flexible working hours to attract part-time workers, improving mobility, granting subsidies to firms to locate in the Assisted Areas where surplus workers are available;
providing advisory services.
If the Banking system has $500,000 in demand deposit liabilities, $125,000 in total reserves and a reserve requirement of 15%: What is the maximum amount by which the money supply
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If the reserve bank wants to pursue a contractionary policy, what should it do?
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