All categories

2 years ago

If the central bank wants to contract aggregate demand, it can the money supply and thereby the interest rate.

1 answer:

3 0

If the central bank wants to contract aggregate demand, it can reduce the money supply and thereby increase the interest rate.

<h3>How is aggregate demand contracted by the central bank?</h3>

The ways that the central bank can contract aggregate demand are:

Increasing higher interest rates
Increase the reserve ratio
Reducing the quantity of loanable funds.

When it reduces the interest rates and the reserve ratio, it will increase the money supply and aggregate demand will increase.

Thus, if the central bank wants to contract aggregate demand, it can reduce the money supply and thereby increase the interest rate.

Learn more about contracting aggregate demand at brainly.com/question/14452841

#SPJ1

You might be interested in

1. Determine the price of the bonds issued on February 1, 2021. 2-a. Prepare amortization schedules that indicate Cromley’s effe

larisa [96]

Answer:

The question is missing the first part:

On February 1, 2021, Cromley Motor Products issued 6% bonds, dated February 1, with a face amount of $65 million. The bonds mature on January 31, 2025 (4 years). The market yield for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $65,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31.

1. Determine the price of the bonds issued on February 1, 2021.

the market value of each bond:

PV of face value = $1,000 / (1 + 4%)⁸ = $730.69
PV of coupon payments = $30 x 6.7327 (PV annuity factor, 4%, 8 periods) = $201.98

market price per bond = $932.67

2-a. I used an excel spreadsheet since there is not enough room here: Cromley Motors PDF

2-b. Again I used an excel spreadsheet since there is not enough room here:

3. February 1, 2021, bonds issued at a discount

Dr Cash 60,623,550

Dr Discount on bonds payable 4,376,450

Cr Bonds payable 65,000,000

4. Cromley's records:

July 31, 2021, first coupon payment

Dr Interest expense 2,424,942

Cr Cash 1,950,000

Cr Discount on bonds payable 474,942

January 31, 2022, second coupon payment

Dr Interest expense 2,443,940

Cr Cash 1,950,000

Cr Discount on bonds payable 493,940

July 31, 2022, third coupon payment

Dr Interest expense 2,463,697

Cr Cash 1,950,000

Cr Discount on bonds payable 513,697

January 31, 2023, fourth coupon payment

Dr Interest expense 2,484,245

Cr Cash 1,950,000

Cr Discount on bonds payable 534,245

Barnwell's records:

July 31, 2021, first coupon payment

Dr Cash 1,950

Dr Discount on bonds payable 2,425

Cr Interest revenue 475

January 31, 2022, second coupon payment

Dr Cash 1,950

Dr Discount on bonds payable 494

Cr Interest revenue 2,444

July 31, 2022, third coupon payment

Dr Cash 1,950

Dr Discount on bonds payable 514

Cr Interest revenue 2,464

January 31, 2023, fourth coupon payment

Dr Cash 1,950

Dr Discount on bonds payable 556

Cr Interest revenue 2,484

Download pdf

pdf

8 0

3 years ago

Sam wants to be a teacher. He has been imitating the behavior, mannerism, and dressing style of teachers at his school. What gro

likoan [24]

Answer:

 models

Explanation:

The teachers that Sam imitates constitute  models  for him.

One of the first learning modes that every human use is the imitation. A baby can learn by direct experience (if he touches a metallic surface in winter the baby learns it is cold) or by imitation: when the baby sees the mom talking the baby learns to move the lips. The mother is baby's first model and the baby learns by imitating her.

When we grow up, we have many models: relatives, friends, peers, teachers, and virutally any person with whom we are in contact.

Imitating continues during all the life and teachers are very important models.

Specially, when the teacher is a good example and arouses admiration, the students will trend to imitate them. Particularly, in the case of Sam who wants to be a teacher: probably Sam has had some excellent teachers whom he admires and made him to want to follow their steps, which is why he imitates them. They are a good model to follow.

5 0

3 years ago

Warren corporation purchased a truck at a cost of $60,000. It has an estimated useful life of five years and estimated residual

s344n2d4d5 [400]

Answer:

What is the amount of depreciation that warren should record for year 3 under the straight-line depreciation method? $15500

Explanation:

Net Value Dep. year End Net value.

Year 1 55000 12000 43000

Year 2 43000 12000 31000

Year 3 31000 15500 15500

Year 4 15500 15500 0

6 0

3 years ago

Why is social media an important part of inbound marketing?.

Orlov [11]

Answer:

to start up stocks and get yourself out there in the marketing world

5 0

2 years ago

Instant rewards reinforce desired behavior. Annual raises are ________ effective in reinforcing behavior because there is too mu

amid [387]

Answer:

B. less

Explanation:

As compared with the instant rewards the annual raises are becomes less effective when the behavior is reinforced also it is depend upon the time gap that lies between the behavior and the actual reward

Therefore as per the given situation, the option b is correct

hence, all other options are wrong

So, the same is to be considered

4 0

3 years ago

If the central bank wants to contract aggregate demand, it can ________ the money supply and thereby ________ the interest rate.

If the central bank wants to contract aggregate demand, it can the money supply and thereby the interest rate.