The combination of expansionary monetary policy and a self-regulating economy will cause real GDP will rise to the level above natural real GDP and the recessionary gap would hence turn into an inflationary gap situation.
<h3>What do you mean by monetary policy?</h3>
Monetary Policy refers to the control of the quantity of money available in an economy through which new money is supplied.
The self-regulating economy experiences a recessionary gap. The real GDP is less than the level of natural real GDP. The gap is been corrected by the rightward shift in the short-run aggregate supply curve.
Due to interplay, real GDP will rise to the level above natural real GDP and the recessionary gap turn into an inflationary gap.
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Answer:
A) $200,000 to Jack
Explanation:
Jack is the primary beneficiary to his late wife's life insurance policy and since he is still alive, so he should get the whole $200,000.
His daughters, Mimi and Ann, are the contingent beneficiaries. That means that in case Jack had died before his wife or he was incapacitated for some reason, then they would have become the beneficiaries of the insurance policy (and each would have received $100,000).
<u>Given:</u>
Farmer's price = $1
Miller's price = $3
Baker's price = $6
<u>To find:</u>
The value added by the miller
<u>Solution:</u>
From the given, we can interpret that after purchasing from the farmer, the miller turns the wheat into flour by grinding and he sells the wheat flour to the baker.
This means that the miller added the cost of grinding with the purchasing cost. We can calculate the cost added by miller by subtracting the farmer's price from the miller's price that is 
Therefore, the value added by the miller is $2.
Answer:
$25 billion
Explanation:
The difference between a 0.25 reserve ration and a 0.20 reserve ratio is 0.05, which represents $5 billion in available money (= 0.05 x $100 billion).
If the total bank reserves is $100 billion, and the reserve ratio is 0.20, the money multiplier = 1 / 0.20 = 5.
If the banks have $5 billion available for loans and the new money multiplier = 5, then the lending capacity of the banking system will increase by $25 billion (= $5 billion available x money multiplier).
Answer:
The investment in Son Corp. should be reported on Pops' December 31, 2018 balance sheet at $1,920,000 ($10 * 192,000).
Explanation:
There is no indication that the fair price of the shares of Son Corp. has changed from its original cost of $10. Therefore, the investment in Son Corp. can only be reported on the balance sheet of Pops' at the cost price on acquisition. But, assuming that the price has fluctuated over the period, the investment would have been valued at the current market price multiplied by the number of shares.
