The actual or real world money multiplier is generally less than the simple money multiplier. Indicate whether the statement is TRUE or FALSE; and then provide support for your answer.

Md Ariful Islam

0 like 0 dislike
1 views
Share with your friends

1 Answers

Md Ariful Islam

Call
The actual or real world money multiplier is generally less than the simple money multiplier. It is true, because in real world not all of the potential free deposited money and money borrowed from the central bank can be loaned by the second, third time and so on. That's why the real multiplier will be lower.
0 like 0 dislike
1 views
Talk Doctor Online in Bissoy App
Provide a good explanation price mechanism and its role in market action by allocating scarce resources among competing needs in a free market and provide a real-world example.

The price mechanism describes the interaction between buyers and sellers how the forces of demand and supply in a free market determine the prices of commodities. The price mechanism also...

1 Answers 1 views
If desired aggregate expenditures are less than actual output, aggregate output will decrease. Explain in detail: True False or Uncertain

If desired aggregate expenditures are less than actual output, aggregate output will decrease, because there is an overproduction of the output, but in equilibrium the aggregate expenditures should be equal...

1 Answers 1 views
explain why the tax multiplier is smaller than the government spending multiplier?

The tax multiplier is smaller than the government spending multiplier. This is because the entire government spending increase goes towards increasing aggregate demand, but only a portion of the increased...

1 Answers 1 views
State whether the following statement is true or false and support your answer with facts and figure: ‘‘In the past few decades, primary sector has created maximum jobs in Pakistan.’’

There are various factors which determine the demand for the economy's output like consumption, investment and government purchase whereas the factors of production and the production fuction determine the supply...

1 Answers 1 views
Explain carefully why the tax multiplier [ΔY/ ΔT = -b/ (1-b)] is negative and why it is smaller in absolute value than the government expenditure multiplier [ΔY/ ΔG = 1/ (1- b)].

Solution:This is the case because the tax multiplier has a negative sign due to the negative magnitude or lesser impact it has on the economy.For example, when the government cuts...

1 Answers 1 views
1. When comparing the investment multiplier in a closed-economy to the investment multiplier in an open-economy it can be concluded that

Investment multiplier establishes a precise relationship given the propensity to consume between aggregate employment, income and the rate of investment.Therefore I can conclude that for a open economy the value...

1 Answers 1 views
4. How is the multiplier affected by a decrease in leakages from the Keynesian model with a government? 1] it decreases [2] it increases [3] no change [4] multiplier is not affected

It increases Multiplier's size tends to be weighed based on the marginal income's proportion going to imports, taxes and savings.

1 Answers 1 views
8. Explain in words and using the notion of expenditure rounds why the tax multiplier is smaller than the expenditure multiplier.

Tax multiplier tends to be smaller compared to spending multiplier since the increase in whole spendings increase aggregate demand. However, only a section of more disposable income tends to be...

1 Answers 1 views
Indicate if the statement below is true or false. A. Thinking starts in the brain and is not a response to our physical world.

True: thinking starts in the as the brains as major brain cells known as neurons responsible for thinking are build in the brain and the entire chemical process that takes...

1 Answers 1 views
State whether the statement is true or false A profession plan is a detailed descriptionof the course of instruction that guides a teacher to provide knowledge to learners

True

1 Answers 1 views
X