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1 year ago

the level of reserves (depositor funds held back from making loans) is very important in determining the money supply.

1 answer:

4 0

It's true that the amount of reserves depositor money withheld from funding loans plays a significant role in influencing the money supply.

All the money and other liquid assets present in an economy on the measurement date are referred to as the money supply. The money supply roughly consists of deposits that can be utilized virtually as easily as cash in addition to actual currency.

Governments issue coin and paper money through a mix of national treasuries and money supply, central banks. By dictating to banks what reserves they must maintain, how to offer credit, and other financial issues, bank regulators have an impact on the amount of money that is available to the general people.

By regulating interest rates and altering the amount of money flowing through the economy, economists study the money supply and create policies based on it. Because the money supply may have an impact on price levels, inflation, and the business cycle, both the public and private sectors conduct analyses. The most significant determining factor in the money supply in the United States is Federal Reserve policy. The term "money stock" also applies to the money supply.

Learn more about money supply here

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Hubert lives in San Diego and runs a business that sells guitars. In an average year, he receives $701,000 from selling guitars.

erica [24]

Answer:

Explicit costs are the monetary costs that a business incurs when it makes a payment, either in the form of wages, or taxes, or to manufacturers, etc.

Implicit costs are the opportunity costs that arise when businesses give up on other options when making a choice. They are not represented by any actual payments.

In this case, we have the following explicit costs:

$420,000 paid to the manufacturer

$247,000 paid in wages and utility bills

And we have the following implicit costs:

$9,000 in rent per year if Hubert rented out the local

$32,000 per year if Hubert worked as a financial advisor

5 0

3 years ago

In what areas is Leslie's overspending hurting her budget?

Rus_ich [418]

Answer:

yes

Explanation:

any all all my stuff going see week

5 0

3 years ago

Read 2 more answers

You are given the following information for Watson Power Co. Assume the company’s tax rate is 23 percent. Debt: 8,000 5.7 percen

____ [38]

Answer:

the company's WACC is 10.04%

Explanation:

Weighted Average Cost of Capital (WACC) is the minimum return that a project must offer before it can be accepted. It shows the risk of the company.

Capital Source Market Value Weight Cost Total Weight

Debt $8,400,000 27.71% 4.389 % 1.22%

Common stock $24,190,000 71.17% 12.2% 8.68%

Preferred stock $1,400,000 4.12% 3.5% 0.14%

Total $ 33,990,000 100.00% 10.04%

Calculation of Market Value and Cost of Debt

Market Value = 8,000×($1,000×105%) = $8,400,000

Cost of Debt = interest × (1 - tax rate)

= 5.7% × ( 1-0.23)

= 4.389 %

Calculation of Market Value and Cost of Common stock

Market Value = 410,000× $59 = $24,190,000

Cost of Common stock = Risk free Rate + Beta × Market Premium

= 4.5% + 1.10× 7%

= 12.2%

Calculation of Market Value and Cost of Common stock

Market Value = 17,500× $80 = $1,400,000

Cost of Preferred stock = 3.5%

7 0

2 years ago

You owe $6,800 on a car loan that has an interest rate of 6.75 percent and monthly payments of $310. You lost your job and your

solmaris [256]

Answer:

It will take 9 months longer to repay this loan

Explanation:

Financial Loan Payments

Let's assume a loan has been received for a present value PV at an interest rate i during n periods. Being R the amount of each payment, then

$\displaystyle PV=R\cdot \frac{1-(1+i)^{-n}}{i}$

Solving for n we have

$\displaystyle n=-\frac{log\left(1-PV.i/R\right )}{log(1+i)}$

The first agreement of payment has the following data

$PV=6,800$

$i=6.75/(12\cdot 100)=0.005625$

$R=310$

Computing n

$\displaystyle n=-\frac{log\left(1-6,800\cdot 0.005625/310\right )}{log(1+0.005625)}$

$n=23.5\approx 24\ months$

The new agreement changes R to 225, thus

$\displaystyle n=-\frac{log\left(1-6,800\cdot 0.005625/225\right )}{log(1+0.005625)}$

$n=33.2\approx 33\ months$

This means that it will take 9 months longer to repay this loan

8 0

2 years ago

Stewart Inc.'s latest EPS was $3.50, its book value per share was $22.75, it had 220,000 shares outstanding, and its debt-to-ass

stellarik [79]

Answer: Option (c) is correct.

Explanation:

Given that,

EPS = $3.50

Book value per share = $22.75

Shares outstanding = 220,000

Debt-to-assets ratio = 46%

Total Equity (Book Value) = Book value per share × Shares outstanding

= $22.75 × 220,000

= $5,005,000

Total Assets = $\frac{Total\ Equity}{1 - Debt\ to\ assets\ ratio}$

= $\frac{5,005,000}{1 - 0.46}$

= $9,268,518.52

Debt outstanding = Total Assets - Total Equity

= $9,268,518.52 - $5,005,000

= $4,263,518.52

= $4,263,519 (approx)

5 0

2 years ago