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3 years ago

Increasing the discount rate can influence the economy by:

Business

1 answer:

NikAS [45]3 years ago

3 0

Answer:

C. discouraging businesses from borrowing money from banks.

Explanation:

The discount rate is the interest rate imposed on commercial banks when they borrow from the Federal Reserve ( the Fed). The banks borrow from the Fed to meet their short-term cash flow requirements. The discount rate is usually higher than the inter-banks rate (the Fed funds rate). An increase in the discount rate automatically pushes the inter-bank rate higher.

The interest rate that commercial banks charge their customer for loans is pegged on the Fed funds rate, which is also the inter-bank rate. An increase in the discount rate will translate to a rise in the bank's interest rates for loans. Businesses and household will reduce their appetite for credit when interest rates go up. A high discount rate is a deterrent to borrowing from the banks.

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jok3333 [9.3K]

Answer:

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4 0

3 years ago

Monopoly power runs counter to the public interest because it leads to high prices, resource misallocation, and inefficiency. An

Stells [14]

Answer:

C. The Robinson–Patman Act of 1936

Explanation:

The Robinson-Patman Act of 1936 is an amendment to The Clayton Act of 1914, which particularly prohibits price discrimination. Price Discrimination is an act in which distributors or sellers of certain goods, give discounts to people who they seem to benefit more from while smaller shops buy the goods at a costlier price.

The instance where the major tire manufacturer has an agreement to make a price discount with the manufacturer of truck tires is an example of price discrimination, and the consequence is that other markets are affected as they now exit the market. This is a clear contravention of the Robinson-Patman Act of 1936.

6 0

3 years ago

Think of three example from your own experience, and explain how they demonstrate the concept of diminishing marginal utility.

rewona [7]

Examples:
1.) Having a stain on your rug there's only so much you can get out before your damaging your rug with cleaner

2.) Babysitting and having the child miss there mom, there's only so much you can do to try to calm him/her down

3.) Watering plants, if you haven't watered plant in a long time so you give them extra water, if you keep giving the plant extra water it will eventually drown and die.

6 0

3 years ago

Refer to Exhibit 7.4, which shows short-run average cost curves. Average cost is lowest for a medium plant when output is _____

MatroZZZ [7]

Answer: c) between Qa and Qb

Explanation:

From the exhibit, the lowest cost will be recorded when output is between Qa and Qb because these points represent the lowest costs per unit for Curves A and C and the lowest points where output can be produced. Output being produced at costs lower than this is therefore the lowest for the medium plant.

3 0

3 years ago

If Congress passes a plan to cut the national debt in half, then:

Alenkasestr [34]

Answer:

3) AD shifts right and output would decrease.

Explanation:

Aggregate demand (AD) is the total number of goods demanded in an economy in a period of time.

If Congress decides to cut the National debt (or accumulated debt of the government) by half, this will make interest rates lower and will encourage investment from the private sector.

The shifting to the right occurs when these components; consumption spending and investment spending increases due to cut in National debt.

The AD curve will shift back to the left as these components decreases.

5 0

3 years ago