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1) Demand for money (economy growth etc.)
2) Monetary policy of central bank.
So these two sides come into equilibrium decision of money supply. More strictly local currency is supplied by central bank - and demand for money is secondary (of course with some issues).
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What determines the slope of IS Curve?
mainly the slope of Is curve depends on ; -the slope of investment schedule -the size of the multiplier
Who determines what goods to produce in the economy?
It is the demand and supply which determines the goods and services to produce in the economy.
What is the economy in which the interaction of supply and demand determines price and output?
Market Economy
Which group of people ultimately determines the products that a free enterprise economy produces?
Which group of people untimately determines the products that a free enterprise economy produce
In a market economy who determines the market price?
Compention
What determines the slope of an IS curve and how?
Investment schedule and size of the multiplier
What determines the slope of IS Curve?
mainly the slope of Is curve depends on ; -the slope of investment schedule -the size of the multiplier
How investment multiplier defend public works in depression economy?
Investment multiplier defends public works in the depression economy because it promotes investments in a deadbeat economy in hopes of turning it around.
What are the assumptions of multiplier theory of keynes?
closed economy
What is the multiplier effect of 1000000 of payroll on the local economy?
4568255
Why it is that business firms that multiplier effects in an economy?
boom panes
Who determines what goods to produce in the economy?
It is the demand and supply which determines the goods and services to produce in the economy.
The money multiplier formula _____.?
determines the amount of new money that will be created with each demand deposit
Why tax multiplier is always be smaller than govt spending multiplier?
If the full multiplier for G (i.e. ignoring crowding out effects) is = change in G/Multiplier Then the tax multiplier is = change in T x marginal propensity to consume/multiplier since the mpc is between 0 and 1 the tax multiplier is less. Intuitively it is not difficult to see why, the change tax enters spending decisions through consumption and consumption is dependant on the mpc. Whereas as G affects spending decisions directly - it is a injection into the economy that does not have to work through some indirect source to have an effect on the economy.
What is the economy in which the interaction of supply and demand determines price and output?
Market Economy
What determines the size of frictional force?
The size of the normal force and coefficient of friction determines the size of frictional force.
What determines the size of a frictional force?
The size of the normal force and coefficient of friction determines the size of frictional force.
