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vovangra [49]
3 years ago
14

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
Business
1 answer:
earnstyle [38]3 years ago
5 0

Answer: Option (B) is correct.

Explanation:

Given that,

Reserve ratio = 25%

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 × (\frac{1}{rr} - 1)

                                                          = 120 × (\frac{1}{0.25} - 1)

                                                          = 120 × 3

                                                          = $360 million

Hence, a decrease in money supply could eventually reach a maximum of $360 million.

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Marizza181 [45]

Answer:

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a. t = 2

A = $8,000 * (1 + 0.06/1)^1*2

A = $8,000 * (1.06)^2

A = $8,000 * 1.1236

A = $8,988.80

b. t = 6

A = $8,000 * (1 + 0.06/1)^1*6

A = $8,000 * (1.06)^6

A = $8,000 * 1.418519

A = 11348.152

A = $11,348.15

c. t = 10

A = $8,000 * (1 + 0.06/1)^1*10

A = $8,000 * (1.06)^10

A = $8,000 * 1.7908477

A = 14326.7816

A = $14,326.78

d. t = 15

A = $8,000 * (1 + 0.06/1)^1*15

A = $8,000 * (1.06)^15

A = $8,000 * 2.3965581931

A = 19172.4655448

A = $19,172.47

3 0
2 years ago
Use a piece of scrap paper to prepare a cost of Goods Manufactured from the following numbers: Beginning Direct Raw Materials -$
Bezzdna [24]

Answer:

the total manufacturing cost is $215,000

Explanation:

The computation of the total manufacturing cost is shown below:

= Direct material used + direct labor cost + manufacturing overhead cost

= $69,000 + $92,000 - $8,000 + $25,000 + $37,000

= $215,000

Hence, the total manufacturing cost is $215,000

We simply applied the above formula

5 0
3 years ago
As a politician, you would be more inclined to propose an increase in the minimum wage when you believe that the new minimum wag
scoundrel [369]
The answer is c. Be equal to the equilibrium wage.
3 0
3 years ago
Legally a corporation is a thing that can endure beyond the natural lives of its members and that has incorporators who may sue
Fed [463]

Answer:

A) True

Explanation:

A corporation is a distinct and separate legal entity from its owners. It enjoys commercials' rights and has obligations, just like a person does. Corporations transact business,  can enter a contract, borrow money, sue, or be sued.

The most salient feature of a corporation is that its owners have limited liability. It means that the owners of a corporation are liable for its obligation up to the extent of their capital contribution. If a corporation is unable to meet its debts, the personal properties of its owners can not be attached to the liabilities.

Many corporations outlive their founders. The most famous companies were incorporated decades ago. A corporation is often described as a legal person. Its lifespan is not dependent on the lives of its owners.

7 0
2 years ago
Fundamental analysis shows that stock in Cedar Valley Furniture Corporation has a price that exceeds its present value. Group of
barxatty [35]

Answer:

The correct option is :

This stock is overvalued; you shouldn't consider adding it to your portfolio.

Explanation:

The stocks that are in cedar valley corporation has a price that exceedes its present value from this statement the first given option doesn't justify as the stocks rates are not undervalued.

Now, in the second option its again given that the stock will be overvalued which is true but it should be added to the portfolio is not correct. so, this option is not considered.

In the third option it mentions that stock is overvalued which is the correct option and also that it shouldn't be added in portfolio.

And the last one states that its undervalued which restricts the option at this point only.

So, third option is correct.

5 0
2 years ago
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