Answer:
$50
Explanation:
If the required reserves are 5%, then the money multiplier = 1 / 5% = 20. If the FED wants to increase the money supply by $1,000, then it needs to initially inject $1,000 / 20 = $50 into the economy.
When the FED wants to increase the money supply, it engages in an expansionary monetary policy. If it wants to decrease the money supply, then it will engage in a contractionary monetary policy.
Answer:
b. 77
Explanation:
The formula for forecasting is :
= 
+ (1 - 
) 
where is forecast for the period and 
is the actual demand for the period.
Last week forecast is = * Demand 2 weeks ago + (1 - ) * Forecast 2 weeks ago
0.2 * 65 + (1 - .02) * 90 = 13
Current week forecast is = * Demand Last weeks + (1 - ) * Forecast Last weeks
0.2 * 50 + (1 - 0.2) * 83 = 77.
It would be false, Shareholders in a corporation are legally considered partial owners of the corporation.
Answer:
1. $146,666.67
2. $129,411.76
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
1. For computing the value of the firm, first we have to compute the Expected rate of return which is shown below:
= 5% + 0.5 × (10% - 5%)
= 5% + 0.5 × 5%
= 5% + 2.5%
= 7.5%
Now the value of firm would be
= Expected cash flows ÷ Expected rate of return
= $11,000 ÷ 7.5%
= $146,666.67
2. If beta is 0.7, then the expected rate of return and the value of firm would be
= 5% + 0.7 × (10% - 5%)
= 5% + 0.7 × 5%
= 5% + 3.5%
= 8.5%
Now the value of firm would be
= Expected cash flows ÷ Expected rate of return
= $11,000 ÷ 8.5%
= $129,411.76
Answer:
a decrease in interest and increase in output
Explanation:
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