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MSF is the rate at which banks can borrow overnight from RBI.This was introduced in the monetary policy of RBI for the year 2011-2012.
The MSF is pegged 100bps or a % above the repo rate.
Banks can borrow funds through MSF when there is a considerable shortfall of liquidity. This measure has been introduced by RBI to regulate short-term asset liability mismatches more effectively
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What is Marginal Rate of Substitution?
marginal rate of substitution
Is the height of an indifference curve the marginal rate of substitution?
Yes. The height of an indifference curve is the marginal rate of substitution.
Law of diminishing marginal rate of substitution?
Marginal rate of substitution tends to decrease with passage of units consumptions.
Why does the marginal rate of substitution diminish?
As a matter of fact, law of diminishing marginal rate of substitution conforms to the law of diminishing marginal utility. According to law of diminishing marginal utility, as a consumer increases the consumption of a good, its marginal utility goes on diminishing. On the contrary, if the consumption of a good decreases, its marginal utility goes on increasing.
Difference between marginal efficiency of investment and marginal efficicency of capital?
MEC is the expected rate of return on capital and MEI is the expected rate of return on investment.
What is the influence of 1 percent increase in the Repo rate?
Marginal Standing Facility
What is the difference between marginal standing facility and repo rate?
LAFMSFLiquidity adjustment facility, this is for short term Marginal standing facility, this is for long term Minimum bidding amount is 5 cr. 1 cr. All clients of RBI are eligible to bid. Only scheduled commercial banks can bid. Bank cannot sell Government security to RBI that is part of bank's SLR quota. bank can sell the Government security from its SLR quota to RBI. Bank can borrow any amount of money as long as it has the securities to sell. Bank can maximum borrow upto 2% of its NDTL. Suppose repo rate is "r%" current rate [29-07-2013] : 7.25%MSF lending rate is always (r+x)%current rate [29-07-2013] : 10.25%
What is Marginal Rate of Substitution?
marginal rate of substitution
What is Definition marginal rate of substitution?
marginal rate of substitution
What is the difference between open market operation and reverse repo rate?
Open market operation are used by the RBI for long term liquidity adjustment while reverse repo rate (or REPO) are used for short term LAF(liquidity adjustment facility). Now govt. introduced MSF(Marginal standing facility like Treasure Bills) to control short term fluctuation. Repo rate change offers range for Call Money Market, and now repo rates are monitored biweekly basis by RBI.
Law of diminishing marginal rate of substitution?
Marginal rate of substitution tends to decrease with passage of units consumptions.
Is the height of an indifference curve the marginal rate of substitution?
Yes. The height of an indifference curve is the marginal rate of substitution.
What is marginal standing facility?
MSF is the rate at which banks can borrow overnight from RBI.This was introduced in the monetary policy of RBI for the year 2011-2012. The MSF is pegged 100bps or a % above the repo rate. Banks can borrow funds through MSF when there is a considerable shortfall of liquidity. This measure has been introduced by RBI to regulate short-term asset liability mismatches more effectively
What is the relevant tax rate for investment decisions?
Marginal Rate
Why does the marginal rate of substitution diminish?
As a matter of fact, law of diminishing marginal rate of substitution conforms to the law of diminishing marginal utility. According to law of diminishing marginal utility, as a consumer increases the consumption of a good, its marginal utility goes on diminishing. On the contrary, if the consumption of a good decreases, its marginal utility goes on increasing.
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What is the name of the tax rate at which additional income is taxed?
Your marginal rate as compared to your effective rate.
