What is multiplier
Multiplier: The Multiplier is the ratio of change in income by the change in investment. Multiplier (k) = ΔY/ΔI
Multiplier: The Multiplier is the ratio of change in income by the change in investment.
Multiplier (k) = ΔY/ΔI
Consider a model economy with a production function Y = K0.2(EL)0.8, where K is capital stock, L is labor input, and Y is output. The savings rate (s), which is defined as
Describe open market operations? What is its consequence on availability of credit? Answer: Open market operations signify the purchase and sale of government secur
Tariffs: -are also called import quotas. -may be imposed either to raise revenue (revenue tariffs) or to shield domestic producers from foreign competition (protective tariffs). -are per unit subsidies designed to promote exports. -are excise taxes on goods exported abroad.
Define revenue receipts. Write the groups in which they are categorized. Answer: Any receipts that do not either make a liability or lead to reduction in assets is
Fiscal policy measures used for achieving full-employment level of output and price include increase in the government expenditure and cut in tax rates. A cut in tax rates eliminates only the adverse effect of high tax rates, whereas an increase in government expendit
Definition of equilibrium price: It is the price which balances quantity demanded and quantity supplied. The equilibrium price is frequently termed as the "market-clearing" price since both buyers and sellers are p
Does full employment take place if AD = AS or S = I?
what can be the minimum value of investment multiplier?
Determine the value of MPC whenever MPS is zero? Answer: Whenever MPS = 0, MPC = 1 – 0 = 1.
How does a commercial bank make money? Answer: Commercial banks are capable to make credit that is many times greater than deposits received by banks. Money creatio
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