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Supplementary Reserve, Requirements/Special Deposit
If the Central Bank feels that there is too much money in circulation, it can in addition require commercial banks to maintain over and above cash or liquid assets some additional reserves in the form of Special Deposits. The commercial banks are asked to maintain additional deposits in their accounts at the central bank, deposits which cease to count among their reserve assets as cover for their liabilities.
Open Economy None of the three economies considered so far are engaged in trade with Foreign Countries. Such economies are often referred to as Closed Economies. In contrast
Explain about the equilibrium in the labor market. Equilibrium into the Labor Market: All of firm will hire labor up to the point at that the value of the marginal product o
Q. Illustrate Internal Economies of Scale? Internal economies of scale are the benefits of large scale production. They are enjoyed by the firm when it increases its scale of p
ISOQUANT ANALYSIS In the long run it is possible for a firm to produce the same output using different combinations of two factors of production. For instance it the two fact
Q. What is Labour Requirements on the production capacity? Labour Requirements: Spending on labour is one of the most vital elements of cost of production. Dependable and cor
Average Total Costs (ATC) This is total cost per unit of output, obtained by dividing total cost by total output i.e. ATC = Total Cost Total Outp
Prices of other related goods i) Substitutes: If X and Y are substitutes, then if the price X increases, the quantity demanded of X falls. This will lead to inc
Uses of Indifference Curve Analysis Indifference curve analysis is useful when studying welfare economics as follows: They are used to indicate the amount of income and
explain perspective of managerial economics
Contributions of economic theory to business economics According to Baumol, there are 3 key contributions of economic theory to business economics. 1. Practice of building
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