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2 years ago

contains funds you have in your bank checking account as travelers' checks and the currency in circulation in the economy.

1 answer:

3 0

<u> M1 </u> contains funds you have in your bank checking account as travelers' checks and the currency in circulation in the economy.

<h3><u>What exactly is M1?</u></h3>

Currency, demand deposits, and other liquid deposits, such as savings accounts, make up M1, which is the money supply. Due to the fact that M1 contains assets and currencies that are either already cash or can be swiftly changed into cash, it is the most liquid element of the money supply. M2 and M3's "near money" and "near, near money," which fall under these categories, cannot, however, be changed to money as rapidly.

<u>How to Determine M1?</u>

The coins and notes of the Federal Reserve that are in circulation outside of the vaults of depository institutions and the Federal Reserve Banks make up the M1 money supply, also known as bills or paper money. The mainstay of a country's monetary system is paper money.

M1 also comprises demand deposits, other checkable deposits (OCDs), traveler's checks (issued by non-banks), NOW accounts at depository institutions, and credit union share draft accounts.

M1 covers securities that are easily redeemable and in circulation for the majority of central banks. However, the term varies a little bit depending on where you are.

Learn more about M1 with the help of the given link:

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2 years ago

Cinnamon Buns Co. (CBC) started 2021 with $61,500 of merchandise on hand. During 2021, $299,000 in merchandise was purchased on

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Answer:

$30,220

Explanation:

Inventory purchased $299,000

Discount (299,000*2%) ($5,980)

Freight Charges $18,500

Inventory returned ($7,800)

Net purchases $303,720

Cost of goods sold=opening inventory+purchases-ending inventory

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4 years ago

Megan and Susan are roommates. They spend most of their time studying (of course), but they leave some time for their favorite a

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Answer:

a. 2/3 gallon
b. 5/7 gallon

Explanation:

1. Megan takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza.

If she makes a pizza therefore, that is 2 hours that could have been used to make a gallon of root beer. However, it takes 3 hours to make a complete gallon so in those 2 hours only;

= 2/3 gallons would have been made

2. Susan takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza.

Like Megan above, the 5 hours that would be used for Pizza would have gone towards making a gallon of beer. If it takes 7 hours to make a gallon then those 5 hours would have made;

= 5/7 gallons of root beer.

3. Absolute Advantage: Megan

The person with the absolute advantage is the person that can produce more goods with the same amount of costs. Megan can make more pizza in a smaller amount of time than Susan so she has Absolute advantage.

Comparative Advantage: Megan

The person with a Comparative advantage is the one that has the lowest opportunity cost when producing a good. Megan again has a lower opportunity cost with an opportunity cost of 2/3 gallons.

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3 years ago

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Answer: The fair market value of the free tour to Costa Rica is a taxable income.

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Publication 525 of the IRS defines taxable and non taxable income.

The IRS lists winnings from raffles and lotteries under Other income.

It also declares that the fair market value of winnings from raffles and lotteries are winnings from gambling. Hence the fair market values of non cash prizes are taxable and must be included as income.

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4 years ago

A local tree farm is trying to decide which fertilizer to use to grow its trees. It can either buy the famous Greenwood Fertiliz

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Answer:

1. NPV calculation

Option 1 ( with Greewood fertilizer) : $2.256

Option 2 ( with Peter's Fertilizer) : $3.835

2. Rate of return calculation:

Option 1: 45.12%

Option 2: 95.875%

Option 2 should be chosen as it provides higher NPV.

Explanation:

1. The detailed calculation for each option is:

Option 1: Present value of sales proceed - initial cost = (8/1.05^2) - 5 = $2.256

Option 2: Present value of sales proceed - initial cost = (10/1.05^5) - 4 = $3.835.

2. The detailed calculation for each option is:

Option 1: NPV/Initial cost = 2.256/5= 45.12%

Option 2: NPV/Initial cost =3.835/10 = 95.875%

To assess which option should be picked with the assumption of infinite time horizon, NPV should be key driver. As Option 2 has higher NPV, Option 2 is chosen.

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3 years ago