Answer:
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The money multiplier is 5. And the total money supply increase by $2,000 million if the Federal Reserve increases reserves by $400 million.
Given,
The Federal Reserve sets the reserve requirement at 20%.
Banks hold no excess reserves, and no additional currency is held.
- The money multiplier displays the amplitude of the change in the money supply as a result of the addition of new reserves to the banking system.
- Banks use the money they are not obligated to retain in reserve to make loans, and the borrowed money shows up on other customers' deposit accounts.
- In macroeconomics, the money multiplier is significant because it controls the money supply, which influences interest rates.
- Because it affects monetary policy and the stability of the banking industry, it is also significant in the banking industry.
The money multiplier formula can be used to calculate the total amount of new deposits or money created.
Money multiplier = 1/reserve ratio
= 1/0.20
= 5
change in Total money supply = Money multiplier × change in reserves
= 5 × $400 million
= $2,000 million
Hence, The money multiplier is 5. And the total money supply increase by $2,000 million if the Federal Reserve increases reserves by $400 million.
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Risk reaction impacts change control administration and weakness administration since change control is a sensible approach to draw close to a change. It can dodge the possibility that the system of an association could wind up plainly interfered.
Answer:D. is the inclusion of a corporation's employees on its board.
Explanation: Codetermination is a term applied in terms of describing the board composition of a corporation to mean the inclusion of the employees of a corporation to form part of the board and also take part in determining the pace and processes of decision making within an organisation.
Codetermination ensure that workers also also part of the decision makers in a corporate entity.
Answer:
Cost of equity = 10.7%
Explanation:
<em>According to the dividend valuation, the value of a stock is the present value of expected future dividends discounted at the required rate of return.</em>
<em>The model can me modified to determined the cost of equity as follows:</em>
Cost of equity = D/P + g
d- dividend payable next period, p- price of stock ,, - g- growth rate
D- 4.5%, p- $2.48 , g -4.5%
Cost of equity = (2.48 /39.85) + 0.045
= 10.7%
