Macroeconomics Answers

: Suppose Mr. Master deposits AED 400,000 into a one-year Certificate of Deposit at 5%
interest. The Central Bank sets the reserve ratio for the banks at 20%.
a) Illustrate how the banks create money with the help of given information.
(Show first 6 steps)
b) Calculate the total money creation in the economy with the help of formula

National Income Accounts.
X 100. Transfers 100. PIT 220. SST 60.
IBT1 40. NPI 40. I 100. CRE 20. C 700.
NFFI 100. Depreciation 60. IBT2 40. G 300. M 200.
Determine GNP.

National Income Accounts.
X 100. Transfers 100. PIT 220. SST 60.
IBT1 40. NPI 40. I 100. CRE 20. C 700.
NFFI 100. Depreciation 60. IBT2 40. G 300. M 200.
Determine NI

National Income Accounts.
X 100. Transfers 100. PIT 220. SST 60.
IBT1 40. NPI 40. I 100. CRE 20. C 700.
NFFI 100. Depreciation 60. IBT2 40. G 300. M 200.
Determine PI.

National Income Accounts.
X 100. Transfers 100. PIT 220.
SST 60. IBT1 40. NPI 40. I 100.
CRE 20. C 700. NFFI 100. Depreciation 60.
IBT2 40. G 300. M 200.
Determine DP

AS/AD Model.
AD: P = 48 - 2Y.
AS: P = 8.
PO: Y = 16.
What is the Inflationary Gap

AS/AD Model.
AD: P = 48 - 2Y.
AS: P = 8.
PO: Y = 16.
What is the Inflation??

AS/AD Model.
AD: P = 90 - 3Y.
AS: P = 15.
PO: Y = 30.
What is the Recessionary Gap??

AS/AD Model.
AD: P = 90 - 3Y.
AS: P = 15.
PO: Y = 30.
What is the Inflationary Gap?

AS/AD Model.
AD: P = 90 - 3Y.
AS: P = 15.
PO: Y = 30.
What is the Inflation?