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Limits on the process of bank deposit creation
On the demand side, there may be a lack of demand for loans, or at least of borrowers who are sufficiently credit worthy. On the supply side, the volume of bank deposits will not in general rise and fall as a result of changes in the amount of cash held or deposited by the public, since the public's currency requirements tends to be fairly stable, and roughly proportional to the volume of transactions.
Basic textbook models, such as the Mundell-Fleming model, say that capital inflow happens due to the domestic interest rate being higher than the world interest rate, and therefore
PER CAPITA INCOME AND INTERNATIONAL COMPARISONS Per capita income figures can also be used to compare the standards of living of different countries. Thus if the per capita in
Q. What is the Nature of Commodity ? The nature of a commodity as well has an effect on the price elasticity of its demand. Commodities can be characterised ascomforts, luxurie
1. The price of a CD (PC) is $10 and the price of a DVD (PD) is $20. Philip has his income (M) of $100 to spend on the two goods. Consider three consumption bundles: (C, D) = (2, 3
Menu Costs Why do firms not change their prices very frequently? Obviously, the costs of changing prices at frequent intervals and in small amounts must be more than the b
Ann owns a lawn-mowing company. She has 400 lawns she requires to cut every week. Her weekly revenue from these 400 lawns is $20,000. Given an 18-inch-deck push mower, a laborer ca
What is the goal of a firm?
Problem 1: You are the manager of a reputed five star hotel in Mauritius and you have been asked by the director of the hotel to advise on possible pricing strategies to increa
Monetary policy The problems concerning the ability of monetary policy to influence the economy, as for instance the doubts about the ability of lower interest rates to st
Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2
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