Margin requirements for deflationary gap
Elucidate the role of margin requirements for correcting deflationary gap.
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Deflationary gap terms to a situation whenever at full employment level of income AD falls/downs short of AS. It is termed as deficient demand.
Margin requirements terms to the margin on the security given by the borrower. Whenever margin is lower, the borrowing capacity of the borrower is higher. If central bank lowers the margin then the borrowing capacity of the borrowers increase. This increase AD.
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Assume that the demand for jeans rises. At similar time, since of an increase in price of cotton, the supply of jeans reduces. How will it influence the price and amount sold of jeans? Discover Q & A Leading Solution Library Avail More Than 1450244 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1960284 Asked 3,689 Active Tutors 1450244 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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