Multiplier and Murabaha: Difference between pages

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An economic concept which states that an injection into the economy will increase the equilibrium level of national income by more than the amount of the injection.  
''Islamic finance''.


The multiplier is defined as 1/(1-MPC), where MPC = Marginal Propensity to Consume.
Murabaha is a sharia-compliant financing arrangement under which a bank buys an asset and sells it on to the customer at an agreed mark-up.  The customer, who could not otherwise afford to buy the asset, pays in instalments.
 
 
Murabaha is sometimes known as 'cost plus financing'.


Hence the higher the MPC, the greater the increase in aggregate income as a result of the injection.




== See also ==
== See also ==
* [[Marginal propensity to consume]]
* [[Islamic finance]]
* [[Marginal propensity to save]]
* [[Sukuk]]

Revision as of 16:21, 15 July 2014

Islamic finance.

Murabaha is a sharia-compliant financing arrangement under which a bank buys an asset and sells it on to the customer at an agreed mark-up. The customer, who could not otherwise afford to buy the asset, pays in instalments.


Murabaha is sometimes known as 'cost plus financing'.


See also

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