Why value of multiplier is low
In poor countries people spend a big percentage of their income so that APC and MPC are high. Yet, the value of multiplier is low. Explain why?
Expert
Working of the multiplier method is based on one basic supposition: that there exists, surplus capacity in the economy therefore that whenever consumption expenses rises (implying raise in demand) there is an equivalent increase in production (implying rise in income). However poor countries lack in production capacity.
Accordingly, if demand increases (in terms of rise in consumption expenses), there is increasing pressure of demand on existing output (that is, implying inflation or rise in prices) instead of increase in output or income.
Name the six agency function of Commercial Bank. Answer: A) Transfer of funds B) Collection of funds C) Purchase and sale of securities. D) Collection of dividends E) Payment of bills &
State main sources of demand for foreign currency? Answer: The four main sources of demand for foreign currency are as follows: A) To buy services and goods from other countries. B) To send a gift abroad.
Can someone explain/help me with best solution about problem of microeconomics in economic... Main concerns of microeconomics would consist of: (w) rates of inflation. (x) consumer options. (y) rates of unemploymen
Whenever consumers paid an amount for water which reflects the value of the net benefits they obtain from consuming it, water would outcome: (1) Maximum consumer excess. (2) Zero consumer excess. (3) Total revenue equivalent to variable cost. (4) Zero
The market demand curve for latest houses would rise in response to a rise in: (1) construction technology. (2) The costs of lumber. (3) Housing prices. (4) Legal price ceilings on rental properties. (5) Expectations regarding future housing prices. Q : Econ question No need apa format no No need apa format no need introduction and conclusion Only answer question being ask, thanks
No need apa format no need introduction and conclusion Only answer question being ask, thanks
When the U.S. furniture market is primarily in equilibrium at point e on S0D0 and then Chinese manufacturers start exporting more furniture to the United States, then this market would shift towards a new equilibrium at: (1) point a. (2) point b. (3) point c. (4) poin
Explain the concept of “economies of scale” and “increasing returns”.
Why is recovery of loans taken as a capital receipt? Answer: Recovery of loans is always treated as a capital receipt since it leads to refuse in financial assets o
Describe Aggregate Expenditure model and also state AD/AS model?
18,76,764
1921746 Asked
3,689
Active Tutors
1436568
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!