--%>
Assignment Help - homework help

Margin requirements for deflationary gap

Elucidate the role of margin requirements for correcting deflationary gap.

E

Expert

Verified

Deflationary gap terms to a situation whenever at full employment level of income AD falls/downs short of AS. It is termed as deficient demand.

Margin requirements terms to the margin on the security given by the borrower. Whenever margin is lower, the borrowing capacity of the borrower is higher. If central bank lowers the margin then the borrowing capacity of the borrowers increase. This increase AD.

   Related Questions in Microeconomics

  • Q : Econ Give the answer of following

    Give the answer of following question. In the quintile distribution of income, the term "quintile" represents: A) 5 percent of the income receivers. B) 10 percent of the income receivers. C) 20 percent of the income receivers. D) 25 percent of the income receivers.

    		•
  • Q : Problems on leftward shift of demand

    Whenever kids abandon a short-lived fad for Dinosaur action figures, this would be exhibited by the: (1) Left-ward shift of demand curve. (2) Right-ward shift of supply curve. (3) Right-ward shift of demand curve. (4) Left-ward shift of supply curve. (5) Movement down

    		•
  • Q : Problem regarding Utilitarianism Can

    Can someone help me in finding out the right answer from the given options. However the idea that people seek happiness and try to evade pain dates back to Epicurus and other ancient Greeks, the individual generally acknowledged as the founder of the ‘modern&rsq

    		•
  • Q : Problem on numbers of Buyers Even when

    Even when each household’s demand curve didn’t shift, the market demand for the butter would increase if there were a raise in: (1) House-hold income. (2) People’s preferences for the butter. (3) Population. (4) Price of margarine.

    		•
  • Q : Problem on marginal returns Select the

    Select the right ans wer of the question. Refer to the following data. Diminishing marginal returns become evident with the addition of the: A) sixth worker B) fourth worker. C) third worker. D) second worker.

    Q : Demand of purely competitive firm for

    This purely competitive firm’s demand as in given figure for labor corresponds to: (1) line segment ab. (2) line segment bd. (3) line segment be (4) line segment df. (5) line segment dg.

    Q : Problem on merging firms Elucidate how

    Elucidate how the efficiency might increase when two firms merge? Answer: If the two firms merge, their joined efficiency is expected to enhance owing to:

  • Q : Absolute Poverty of Income A family

    A family whose income leaves this hovering at the brink of survival and that gives only a razor’s edge existence is experiencing: (w) relative poverty. (x) economic shock. (y) financial destitution. (z) absolute poverty.

    Q : Law of demand Describe the law of

    Describe the law of demand with help of a schedule diagram? Answer: The Law of demand states that there is an inverse relationship among the price of a commodity an

    		•
  • Q : Problem on falling income causes

    I have a problem in economics on Problem on falling income causes increase in demand. Please help me in the following question. If falling income causes the demand for a good to rise, it is an: (1) Inferior good. (2) Costly biological necessity. (3) N

    		•