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Q. What do you mean by multiplier effect?
Loans and deposits in banks give rise to a significant multiplier effect. We use a simple instance to explain this effect. Consider the bank K-bank with total deposits of 10,000 (millions or whatever). K-bank is aiming for a reserve ratio of 10% of deposits. At the instance it has lent 9,000 and has 1,000 in reserve - exactly meeting their desired reserve ratio.
If a supply curve goes through the point P = $10 and Qs = 320, then a. $10 is the highest price that will induce firms to supply 320 units b. $10 is the lowest price that wil
Let the real interest rate, i r , equal 5 percent and the rate of depreciation, d, equal 10 percent. In this case, if the price of a piece of capital is P K = $10,000, what is th
1) Suppose you are dealt two cards from a standard deck of playing cards. a) What is the probability of being dealt a pair of aces? b)There are 13 possible pairs possible (Ac
A vital question is whether the equilibrium we have identified in labor market (with a high unemployment rate) can remain in long run. Will there not be adjustments which will take
A sample of 2,000 licensed drivers revealed the following number of speeding violations. 0 violations for 1,910 drivers. 1 Violations for 46 drivers. 2 violations for 18 drivers. 3
Pine Village needs some additional recreation fields. Construction will cost $225,000 and annual O&M expenses are $85,000. The city council estimates that the value of added youth
Assume that the economy is characterized by the following structural equations: C = 160 + 0.6 (4 - T) I = 150; G = 150; T = 100. a) Determine the equilibrium output level
Evaluate the impact of an aging population on state and local government expenditures. Suggest strategies that government should take in dealing with this situation. Justify your r
The following is the information from the national income accounts for a hypothetical country: GDP Rs. 6000.00 Gross Investment Rs. 800.00 Net Investment Rs. 200.00 Consumption Rs.
Knowing that a neoclassical, capitalist economy depends on continuous economic growth (by making its production, distribution, and consumption more efficient), what might a savvy p
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