1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
dolphi86 [110]
2 years ago
13

1. Please reflect on how the money multiplier concept can be an important tool of both expansionary as well as contractionary mo

netary policy for any central bank such as the U.S. Federal Reserve Bank?
2. The Federal Reserve Bank lowered the required reserve ratio to 0% across the board in 2020. Explain the potential reasoning behind this lowering to 0% and its intended effect on the economy.
Business
1 answer:
yawa3891 [41]2 years ago
4 0

The money multiplier concept uses  three key actions that is done by the Fed so as they can widen the economy and these includes the use of a decreased discount rate, the buying government securities, and also by lowering reserve ratio.

<h3>What is expansionary and contractionary monetary policy?</h3>

A monetary policy that is known to be that which helps to lowers interest rates and influence borrowing is called an expansionary monetary policy or one can say a loose monetary policy.

Also, a monetary policy that tends to bring up interest rates and lowers borrowing in any economy is known to be a contractionary monetary policy and also called tight monetary policy.

<h3>Thee potential reasoning behind this lowering to 0% and its intended effect on the economy?</h3>

Note that Expansionary monetary policy aims to increases the money supply while  Contractionary monetary policy aims lower the money supply.

Therefore, the use of lower rates of economic growth is one that tens to give more likelihood or chance for the shift to renewable energy. It also leads to more saving, and investing.

Learn more about multiplier concept from

brainly.com/question/8263146

#SPJ1

You might be interested in
In a perfectly competitive market, firms face no barriers to entry or exit.
ipn [44]
The answer to this question is true.
3 0
3 years ago
Read 2 more answers
What to do with office space to make money? How would you arrange them?
hoa [83]

Answer:

a bigger space

Explanation:

a bigger space because u have a alot to do. you can have more people working. or if it private then a room for secretary and your office in the business

7 0
3 years ago
When employees at all occupational levels are asked to rank what is important to them, the order that put them in is: sufficient
bazaltina [42]

Explanation:

I don't understand the question. Maybe elaborate more.

6 0
3 years ago
When purchasing a vehicle which of the following would initially offer the lowest monthly payment
choli [55]

Answer:

Balloon payment plan

Explanation:

4 0
2 years ago
Read 2 more answers
The concept of risk and return is subjective for different people, as well as for corporations.
Juli2301 [7.4K]

Answer:

Risk and Return

1. Joe is an average investor. His financial advisor gave him options of investing in stock A, with a σ of 12%, and stock B, with a σ of 9%. Both stocks have the same expected return of 16%. Joe can pick only one stock and decides to invest in stock B.

Good Financial Decision?

Yes

No

2. Marcie works for an educational technology firm that recently launched its employee stock option plan (ESOP). Marcie allocated all her investments in the ESOP.

Good Financial Decision?

Yes

No

3. rin wants to invest in a hedge fund that has had a very strong performance track record. The hedge fund has given its investors a return of over 60% for the past five years. Although Erin is tempted to put her money in the fund, she decides to conduct due diligence on the hedge fund’s assets, because she is aware that past performance is no guarantee of future results.

Good Financial Decision?

Yes

No

Explanation:

1. Joe's decision to invest in stock B is a good financial decision.  Since both investments have the same returns, the decision on which investment to take shifts to the standard deviation of the returns, which specifies the variability of the returns.  Invariably, the investment with less standard deviation should win the vote.  Therefore, Joe's decision is a good financial decision because investment in B has a standard deviation of 9% unlike A's 12%.

2. Putting all eggs in one market as Marcie had done by allocating all her investments in the ESOP is not a good financial decision, theoretically.  It is always best to spread the risks, though higher-yielding investments (returns) bear higher risks.

3. The decision of Erin to conduct due diligence on the hedge fund's assets, despite its past performance is a good financial decision.  Due diligence reveals some behind-the-scene information that are instrumental in making sound business decisions.  Who are the present managers of the fund?  What systems are in place in the entity to guarantee similar future performance, all things being equal?  What market's sentiments and information are available for consideration?  These questions, and many others can be answered through a due diligence.  Surely, "past performance is no guarantee of future results."

3 0
3 years ago
Other questions:
  • A company failed to record unrealized gains of $26 million on its debt investments classified as trading securities. Its tax rat
    10·1 answer
  • Rachel plans to set up a beautifully furnished office for her interior decorating business. She will describe it in her business
    14·2 answers
  • A judge denied a 94-year-old woman s attempt to force a Lottery Commission to pay her $3.9 million winnings up front on the grou
    5·1 answer
  • Companies may want to consider budgeting for contributions to employee loss expenses (such as funerals) as well as for counselin
    12·1 answer
  • What is the typical relationship between time and interest rate?
    8·2 answers
  • One study found that companies with the highest levels of quality are how many times more productive than their competitors with
    14·1 answer
  • Julia owes her dad $12. She wants a new blouse that just went on sale, so she borrows $20 from her sister. She pays her father $
    10·1 answer
  • discuss how a large food retailer , with many shops could effectively communicate corporate objectives to it's workforce ​
    9·1 answer
  • Banks in Ruritania have a required reserve ratio of 5%5% . Round all answers to one place after the decimal. What is the simple
    7·1 answer
  • If two identifiable markets differ with respect to their price elasticity of demand and resale is impossible, a firm with market
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!