Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The Transmission Mechanism
The mechanism by which the changes in monetary policy affect aggregate demand is called 'transmission mechanism'. Two stages in transmission mechanism are important. First is that an increase in real money supply causes a portfolio disequilibrium at the prevailing interest rate and level of income, i.e. people are holding more money than they want. They try to get rid of the excess money they are holding by buying financial assets. This action of theirs pushes up the price of financial assets and thus causes the interest rate to fall.
The second stage of the transmission process occurs when the change in interest rate affects aggregate demand. The fall in interest rates induces an increase in investment expenditure, and also possibly consumption expenditure, thereby increasing the aggregate demand and ultimately the income.
Aggregate Supply in the Short Run Production takes place in business sector on the basis of an expected price for its output. However, costs are incurred in anticipation of sa
how useful is national income statistics for indicating living standards
what is phillips curve
Including different interest rates with different maturities would complicate the models however it wouldn't buy you very much. Because interest rates with different maturities are
Suppose that an investment tax credit is stated to be temporary in nature, and the credit will be 10% on newly acquired capital (investment) equipment and will last just one year o
An ecologist is interested in the possible negative effects of marinas and boat mooring areas on the abundances of fish. Having read Hurlbert's paper about pseudoreplication, he de
Determine what is the yield curve The yield curve is a graph of interest rates of different maturity (recalculated to yearly rates) at a particular point in time. It is common
Hello, I am having difficulty in understanding what multiplier is.
Desired Aggregate Spending Desired aggregate spending refers to the volume of purchases of the currently produced goods and services that all spending units in the economy wish
INDEX NUMBERS OF PRODUCTION Among the commonly used economic indicators to monitor current trends in the economy are indices of production. The main aggregative indices used t
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd