Assume that the required reserve ratio is 25 percent. If the Federal Reserve sells $120 million in government securities to the
general public, the money supply will immediately: A. Decrease by $120 million with this transaction, and the decrease in money supply could eventually reach a maximum of $480 million
B. Decrease by $120 million with this transaction, and the decrease in money supply could eventually reach a maximum of $360 million
C. Increase by $120 million with this transaction, and the increase in money supply could eventually reach a maximum of $480 million
D. Increase by $120 million with this transaction, and the increase in money supply could eventually reach a maximum of $360 million
Fed reserve bank sells (securities) to public = $120 million
When a central bank sells the government securities to the public then as a result money supply in an economy decreases. This is an instrument of monetary policy known as " Open market Operations".
The supply of money is directly decreases by $120 million.
and
Money creating potential of banks = Amount of securities ×
= 120 ×
= 120 × 3
= $360 million
Hence, a decrease in money supply could eventually reach a maximum of $360 million.
Julio is
devising a marketing plan for introducing his company's products into a new
market. Julio comes up with customized marketing strategies that cater to the
unique needs of the new market. all his decisions involve risk and uncertainty
as he is unaware of the conditions in the new market. The type of decision
being made by Julio in the above situation is called a non-programmed decision.
Non-programmed decision deals with risk and uncertainty. It is also complex and
unstructured.
The Human Resources (<em>HR</em>) department is in charge of recruiting and selecting new personnel with the characteristics and profile the organization is looking for. Besides, the HR role is to provide employees the sources necessary so they can perform their duties in a proper environment within the firm.
