Money supply = Currency in circulation + Checkable deposits.=600 + 900 = 1500 Billion
Current deposit ratio = Currency in Circulation/ Checkable deposits. = 600/900 = .667
Excessive reserve ratio = Excess Reserves/Checkable deposits.= 15/900 = .0167
Money multiplier = (1 + C)/(rr + ER + C)= (1 + .667)/ (.0278 + .0167 + .667) = 2.343
Answer:
The firm will sell 600 units at $20
Explanation:
Giving the following information:
d = annual demand for a product in units
p = price per unit
d = 800 - 10p
p must be between $20 and $70.
Elastic demand
We have to calculate how many units the firm will sell at $20
d=800-10*p=800-10*20= 600 units
Answer:
The effective rate of protection for the U.S. steel industry is approximately 17.5%
Explanation:
Mathematically, the effective rate of protection is calculated as follows;
e = (n-ab)/(1-a)
where n is the nominal tariff rate on the final product , a is the ratio of the value of the imported input to the value of the finished product and b is the nominal tariff rate on the imported input
Mathematically;
a = value of iron ore/value of steel = 100,00/500,000 = 1/5 = 0.2
From the question, we can see that nominal tariff rate for steel n = 15% = 15/100 = 0.15
The nominal rate for iron ore b = 5% = 5/100 = 0.05
So we substitute all of these into the equation of e above
e = {0.15-0.2(0.05)}/(1-0.2) = (0.15-0.01)/0.8 = 0.14/0.8 = 0.175 which is same as 17.5%
