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Functions of a Commercial Bank 1. Credit Creation Creation of credit is a major function of a commercial bank. When a bank creates credit or advances loans, there tends
Scope of Economics
The events X and Y are mutually exclusive. Suppose P(X)=.05 and P(Y) =.02. What is the probability of either X or Y occurring? What is not probability of X nor Y happens?
Once we have monthly data on a price index we can evaluate the inflation. In most nations, the percentage change in price index during one month is small. Hence it is more common t
Money is anything which is acceptable in settlement of a debt. But, paradoxically, the main asset used to settle debts in modern economies is other debts. After all, bank deposits
Oil price shocks lead to large adverse supply shocks in the macroeconomy, infer Dornbusch et al (2008) who define an adverse supply shock as; ‘one that shifts the aggregate supply
Consider an economy with the following characteristics: i. The price-level is fixed ii. The economy is closed (Exports - Imports = 0) iii. Government spending (G) and Inve
Find the Equilibrium Quantity In a small town only two candy shops operate and they compete with each other in quantity. Consumers do not differentiate between candies sold by
A one-car taxi company receives an average of 18 calls per day. The receptionist takes down details of the requested journey and relays them to the driver by radio. Each passenger'
Illustrate about the Effective exchange rate Assume that we are interested in external competitiveness of a country, say Japan. To do this we could look at evolution of a speci
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