Define money supply.
Money supply is the entire stock of currency and other liquid instruments held by the people of an economy at a particular point of time. The money supply can include cash, coins and balances held in checking and savings accounts.
Explain how 'distribution of gross domestic product' is a limitation in taking gross domestic product as an index of welfare.
Given that national income is Rs.80 crore and consumption expenditure Rs.64 crore, find out average propensity to save. When income rises to Rs.100 crore and consumption expenditure to Rs.78 crore, what will be the average propensity to consume and the marginal propensity to consume?
Explain the relationship between investment multiplier and marginal propensity to consume.
