increase aggregate demand in order to escape a recession
Answer: The answer is central bank
Explanation:
Budget deficit : This is when government total proposed expenditure for a period is more than the total estimated revenue. When this happens, government get the money to finance the deficit in the budget from the central bank or ask the central bank to print more currency or get aid and grant from foreign aid donors to finance the deficit.
Loan fund to the banking system: This is a function of central bank when they act as lenders of last resort to the commercial bank. If people begins to withdraw their money from commercial banks, the banks may be placed in such a position that they will not have enough cash to pay their customers. They will run to the central bank to borrow money or to rediscount bills and the central bank must not refuse to come to the aid of commercial banks in order to prevent banking crisis which may shake a country's economy.
Sells newly issued government bond : This is when central bank wants to reduce the volume of money in circulation, the central bank sells bond or securities in the open market .people buy with cheque drawn on their deposits in the commercial banks. The central bank then presents the cheque to the commercial bank and draw on their cash reserves by this the cash reserve of commercial banks is reduced and reduce the supply of money in the economy.
Create money out of thin air: This is the central bank function of issuing notes, it is the legal authority to issue notes. When new notes are to be put into circulation, this is done by the central bank .but the new notes are set into circulation through the commercial banks.
Control the money supply : This is the function of central bank to regulate the volume of money in circulation or to mop up excess liquidity in the economy by selling treasury bill through the open market to the members of the public .It collect money from the commercial banks this will reduce the cash reserves of commercial banks and reduce their loan given capacity.
Government bonds, the money supply : The central bank is the legal authority to sell government bonds in order to mop up the excess liquidity in the economy. When their is too much money in circulation, the central bank make use of monetary policy instruments such as the open market operation to reduce the supply of money in circulation.
Answer:
In 5.99 years, the invested amount is recovered.
Explanation:
In the payback, we analyze in how many years the invested amount is recovered. The computation is shown below:
In year 0 = $419,000
In year 1 = $0
In year 2 = $0
In year 3 = $69,000
In year 4 = $98,000
In year 5 = $109,000
In year 6 = $145,000
In year 7 = $165,000
If we sum the first 5 year cash inflows than it would be $276,000
Now we deduct the $276,000 from the $419,000 , so the amount would be $143,000 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $145,000
So, the payback period equal to
= 5 years + $143,000 ÷ $145,000
= 5.99 years
In 5.99 years, the invested amount is recovered.
Answer:
SEP IRA
Explanation:
For this type of company, the best type of plan would be a SEP IRA. This refers to a Simplified Employee Pension Plan and is a plan that is set up by an employer, with deductible contributions made by the employer themselves. The employer sets the actual contribution rate when creating the plan, and provides all employees the same contribution rate. The annual contribution of such an account is capped at $56,000 in 2019 and the individuals may withdraw the total amount of the account tax-free when they turn 59 1/2 years old.
