Answer:
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Explanation:
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<u> 26.4 percent</u> the change in the money supply when the fed purchases $600 worth of bonds and the required reserve ratio is 8 percent assuming banks hold no excess reserves
<h3>What is
money supply?</h3>
The total amount of money and other liquid assets in an economy on the measurement date is known as the money supply. Both cash and deposits that can be accessed virtually as easily as cash are roughly included in the money supply.
Through a mix of their central banks and treasuries, governments issue coin and paper money. By imposing reserve holding requirements on banks, dictating how to grant credit, and handling other monetary issues, bank regulators have an impact on the amount of money that is available to the general people.
The quantity of money or cash in circulation within an economy is referred to as the money supply.
Numerous measurements of the money supply also factor in non-cash assets like credit and loans.
Monetarists contend that, all other things being equal, expanding the money supply results in inflation.
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Answer:
Business Taxes.
Explanation:
A change in business taxes is most likely to change both aggregate demand and aggregate supply.
Aggregate demand can be defined as the total amount of goods and services by consumers at a specific period of time and price level in an economy.
Aggregate supply can be defined as the total amount of goods and services an organization is willing to sell or provide to it's consumers at a specific price level.
When business taxes are imposed on businesses, such as manufacturing companies, these in turn affect the demand and supply framework (final goods and services).
Basically, business taxes causes shifts in demand and supply, which in turn affect the price and quantity of goods and services in an economy.
Hence, companies would either be forced to cut-down on the amount of goods and services provided, result to borrowing or downsizing their manpower. As a result of this, they won't be able to meet the demands of their consumers.