Money flows are opposite to real flows ?how in economic

Q: What are open-market operations, and how do they influence the money supply? Discuss this with…

A: The central bank of Pakistan influences money supply through open market operations.

Q: How does a central bank changes the money supply? Explain 3 main ways.

A: Changing the money supply in the economy is one of the most important functions of the central bank.…

Q: Which of the following is NOT a function of money as presented in economics? medium of exchange…

A: Money is the medium of exchange and acts as a legal tender.  Medium of exchange means any goods and…

Q: In what respects is the central bank like a private banking institution and it what respects is it…

A: The central bank is an apex banking institution in a country. It is responsible to regulate the…

Q: How do the expansionary and contractionary monetary policy affect the quantity of money?

A: The credit-control system adopted by the central bank of a country to achieve its macroeconomic…

Q: What are the two reasons that people want to hold money? In other words, what are the two types of…

A: In general, individuals prefer to have their cash on hand rather than deposit it in a bank. Cash or…

Q: What is fisher's quantity theory of money

A:

Q: Money is dynamic in nature how in economics!??

A: Money is the tool that is used to buy goods and services in the market.

Q: What are the three functions of money? How does each function contribute to a more smoothly…

A: Money is an economic unit that is used as a medium of exchange for all the transactional purposes of…

Q: In our depiction of the money market, the money supply is controlled by which of the following?…

A: The entire amount of money that is at any given time money in circulation is known as the money…

Q: List and briefly explain the functions of money

A: Money is an instrument that act as the medium of exchange for the purchase of goods and services.…

Q: How would each of the following affect the demand for money?a forecast by the Central bank that…

A: Equilibrium interest rate: The interest rate at which money supply is equal to the money demanded in…

Q: Define the term money multiplier?

A: Money multiplier is the ratio of change in money supply to the change in monetary base of an…

Q: what is the view of Business cycles on money neutrality?

A: The basis of the neutrality of money theory is that money is a neutral factor that has no real…

Q: xplain the reasons for which economic units will hold money from the viewpoints of the five…

A: Introduction: Money: People may exchange goods more easily in an economy if there is a system of…

Q: How does the textbook money creation model differ from the real world money creation model? What’s…

A: Money: Money is a commodity that is widely accepted as an economic exchange medium. It is the medium…

Q: hat kind of monetary policy can be used to fight against recession?

A: Monetary policy delineates the policy framework of the monetary authority of the economy.  It…

Q: When the businesses have not been able to pay back loans, what are the impact the national money…

A: When the businesses have not been able to pay back loans, the nominal money supply decreases in the…

Q: Please explain the functions of money and each money supply level.

A: Money is an economic instrument that acts as a medium of exchange and allows economic agents to…

Q: What is the difference between commodity money and fiat money? Is there a scenario you can think of…

A: Money is used for exchange purposes. Money is also used as unit of account and store of value.

Q: Explain the Keynesian Concept about Money?

A: According to keynes,when quantity of money increases,due to which output and employment…

Q: what is the overall impact of lower interest rate on the money market

A: Interest rate changes can have a beneficial or negative impact on the markets. Central banks…

Q: What is Money? What makes it useful? Explain its primary and derivative functions of Money? explain…

A: Answer: Money: Money is anything that is generally accepted as a medium of exchange, a measure of…

Q: What is the difference between Commodity v/s Fiat Money? explain elaborately?

A: Money is a commodity that is widely used as a medium of exchange in economic transactions. It acts…

Q: economics, money refers to wealth income currency assets used and accepted as payment.

A: Money consider as a medium of trade, as a store of significant value, and as a unit of record. Mode…

Q: What is the difference in goals or endpoints between the circulation of commodities and the…

A: In a market, capital is the term that is used to define the assets requited for making operating…

Q: Draw a graph and explain what is the overall impact of lower interest rates on the money market

A: Money market is the market for short run fund . Where financial instruments which are traded is…

IS-LM-PC Analysis

The IS (Investment Saving), LM (Liquidity Preference- Money Supply), and PC (Philips Curve) is the model that looks at the dynamics of output and inflation. It takes into account the central bank policy decision to adjust the inflation and real interest rate in the economy. It enables the economist to weather to priorities between employment and inflation rate analyzing the model. It is a practice-driven approach adopted by economists worldwide.  

IS-LM Analysis

The term IS stands for Investment, Savings, and LM stands for Liquidity Preference, Money Supply. Therefore, the term IS-LM model is known as Investment Savings – Liquidity preference money Supply. This model was introduced by a Keynesian macroeconomic theory which shows the relationship between the economic goods market and loanable funds market or money market. In other words, it shows how the market for real goods interacts with the financial markets to strike a balance between the interest rate and total output in the macroeconomy. This particular model is designed in the form of a graphical representation of the Keynesian economic theory principle. The output and money are the two important factors in an economy.