Answer:
Because the current money multiplier is <u>2</u>, the Fed would <u>BUY $500,000</u> worth of bonds, <u>INCREASING</u> the monetary base and so increasing the money supply by $1 million.
Explanation:
if the Fed wants to increase the money supply by $1 million, then it would need to purchase US securities worth $500,000. The formulas used to calculate the impact of the Fed's operations are:
increase in money supply = additional funds x money multiplier
- money multiplier = 1 / reserve ratio = 1 / 50% = 2
- desired increase in money supply = $1 million
$1,000,000 = additional funds x 2
additional funds = $1,000,000 / 2 = $500,000
Answer:
1. False
2. False
3. False
4. True
5. True
Explanation:
1.
Sarbanes-Oxley Act was a federal law that was established by congress to sweep auditing and financial statements for public companies. The main aim for this was to improve the investor confidence by improving reliability in accounting statements. Errors in the financial statements for the public companies were to be minimized following this law especially in the wake of numerous cases of corporate crime. This law was never passed to ensure that investors only invest in companies that will be profitable, since the choice of which company to invest in is exclusively left to the investor. So the above statement is false.
2.
Ethics can be defined as a set of rules and regulation that govern the moral behavior of someone. Ethical standards vary from one region to another since they are majorly cultural, for example; a behavior in the United States can be considered as appropriate while the same behavior in a different place can be inappropriate. Ethical standards are either right or wrong, and the actions are judged on these terms. Ethics don't measure whether a actions are loyal or disloyal, thus the statement is false.
3.
The primary accounting standard setting body in the United States is Financial Accounting Standards Board (FASB). This body is charged with regulating and setting the best standard of accounting practice. The FASB usually constitutes a board whose officials are rigorously assessed. The board members have to be professionals in the field of accounting. Securities and Exchange Commission on the other hand is an independent federal agency with the authority to enforce federal security laws. Thus the statement above is false.
4.
The historical cost principle suggests that the companies record assets cost at their original cost and continue to report them at their original cost over the time the asset is held. The historical cost principle is a generally accepted accounting principle that has been in use for a long time. The definition about the historical cost principle in the question above is therefor true.
5.
The monetary unit assumption dictates that business related activities be converted to monetary units. There are some business transactions that are however quite difficult to convert into monetary units, therefor the accountant in using this principle is only obliged to record only the transactions that can be measured in money terms. The statement about monetary units in the question above is thus true.
Answer:
GDP in 2008 is $500 billion
Explanation:
Based on the information provided within the question it can be said that in this scenario we can conclude that the Gross Domestic Product (GDP) in the year 2008 is of $500 billion dollars. That is because the gross domestic product calculates the monetary value of all the goods and services that were produced within the nation's borders.
Answer: $118,304
Explanation:
Given the following:
End of year cashflow of portfolio is either :
$70000 or $195,000
Probability of either equals = 0.5
With a riskless investment in T-bills of 4% and a risk premium of 8%, then the expected rate of return = 12%
Therefore ;
Amount of portfolio × (1 + expected rate of return) = expected cashflow.
Expected cash flow = probability × end of year cashflow
Expected cashflow = (0.5 × 70000) + (0.5 × 195000)
= 35000 + 97500 = $132500
Therefore ;
Amount of portfolio × (1 + 0.12) = 132500
Amount of portfolio × 1.12 = 132500
Amount of portfolio = 132500/1.12
Amount of portfolio = $118,303. 57
=118,304
Answer and Explanation:=
Medium of exchange - It is used to enable the sale and purchase between the parties. It represents the standard of value that is necessary to accept all the parties.
Larry writes a check for $4,000. It is a medium of exchange because it shows trade of goods between Larry and the car seller.
Unit of account - It gives permission to do the differentiation between two things.
Larry can easily differentiate the price of the super is more than the price of duper. It is unit of account because he knows the value of the super and duper.
Store of value - It is the value that can be saved and exchanged for a long time period.
Larry has saved checking amount is $4000. It is store of value because it is saved amount.
