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1 year ago

When the Fed buys securities from the public, banks' reserves and the quantity of money .

1 answer:

5 0

When Fed buys securities from the public, banks' reserves increases and the quantity of money reduces in supply.

<h3>What are Securities?</h3>

Securities simply put are assets that has monetary values like bonds, stocks and they can be traded.

In recent times, people enjoy the digital form of money/securities like cyptocurrencies.

Learn more about Securities here:

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How did the invention of money as a medium of exchange affect the barter system?

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The barter system is a form of trading in which goods are exchanged directly for other goods without the use of money or as an intermediary, without a medium of exchange. The invention of money supplemented the barter system by providing a nonperishable medium of exchange.

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3 years ago

In a brainstorming session for a new drug to lower cholesterol, the members of the marketing department agreed the benefits of t

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Answer: C- Encoding

Explanation: Encoding in communication is the process whereby the sender utilizes oral symbols like words, signs, pictures, videos, and non-oral symbols like body language, hand signals, facial expressions for which the sender believes the individual on the receiving side or audience will comprehend without misinterpreting.

It is the way of turning or transforming ideas into communication by using a channel that could be texts, phone calls or even in-person conferences. In this case, the marketing department decides to encode an ad campaign to the market so as to promote the new drug for lowering cholesterol.

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3 years ago

Glenda is in the ninth grade, and she loves to write and share events that take place around her. She wants to become a journali

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Answer:

Explanation:

This will help her develop journalism skills at a younger age

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2 years ago

1. How is inflation measured? Fill in the blanks to complete the passage about the CPI and the GDP deflator. The Consumer Price

Murljashka [212]

Answer:

First blank: Consumers

Second blank: GDP

Third blank: CPI

Explanation:

The Consumer Price Index is used to measure the basic basket of services and goods that a normal person often buys in order to have a decent quality of life, the GDP includes all goods and services produced, for example all the office equipment, or farm equipment that was produced by a countries economy, the average customer doesn´t need farm equipment nor office equipment that is why it is not taken into account in the Costumer Price Index.

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3 years ago

On January 1, 2021, Essence Communications issued $800,000 of its 10-year, 8% bonds for $700,302. The bonds were priced to yield

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Answer:

before decrease in rates: 706,483

after rate decrease: 751,360

interest expense 35,015.12

discount on BP 3,015.12

cash 32,000

--bonds first interest payment--

interest expense 35,165.87

discount on BP 3,165.87

cash 32,000

--second interest payment--

unrealized loss 44,877

discount on bonds payable 44,877

--to adjust bonds valuation--

Explanation:

First, we solve for the present value of the bond to get the proceeds from the issuance.

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 32,000

time 20

rate 0.05

$32000 \times \frac{1-(1+0.05)^{-20} }{0.05} = PV\\$

PV $398,790.7310

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 800,000.00

time 20.00

rate 0.05

$\frac{800000}{(1 + 0.05)^{20} } = PV$

PV 301,511.59

PV c $398,790.7310

PV m $301,511.5863

Total $700,302.3173

Now, we do the table for the first year:

# / Principal/ paid / interest / Amort/End. P

1 700,302 32000 35015.12 3015.12 703,317

2 703,317 32000 35165.87 3165.87 706,483

Now, we have to redo the calculations for the bonds market value considering a decrease in the market rate to 9%

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 32,000

time 18

rate 0.045

$32000 \times \frac{1-(1+0.045)^{-18} }{0.045} = PV\\$

PV $389,119.7377

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 800,000.00

time 18.00

rate 0.045

$\frac{800000}{(1 + 0.045)^{18} } = PV$

PV 362,240.30

PV c $389,119.7377

PV m $362,240.2951

Total $751,360.0328

We adjust for: 751,360 - 706,483 = 44,877

This will be an unrealized loss as the liability increases but, will be realized on the redemption of the bonds or at the end of the bonds' life.

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3 years ago

When the Fed buys securities from the public, banks' reserves ________ and the quantity of money ________.

When the Fed buys securities from the public, banks' reserves and the quantity of money .