All categories

3 years ago

Open market operations refer to which action by a central bank?

Business

1 answer:

Tom [10]3 years ago

3 0

Answer:

O C. Buying and selling treasury securities

Explanation:

Through the Federal Reserve, the government employs monetary policy to influence the direction and speed of economic growth. Open market operations are part of the monetary policies. It entails the government buying or selling securities from commercial banks.

Monetary policies regulate the amount of money supply in the economy. When the government wants to increase the amount of money in the economy, it buys government securities from banks. The Fed deposits large sums of money to banks in exchange for the securities. The Banks lends the money to firms and households, therefore increasing money in the economy. The selling of securities by the Fed decreases the amount of money in the country.

You might be interested in

Analyzing and Reporting Financial Statement Effects of Bond Transactions Winston Inc. reports financial statements each December

attashe74 [19]

Answer and Explanation:

The financial statement effects template to reflect the following events is shown below:-

Balance Sheet

Transaction Cash assets + Non Cash = Liabilities+Contributed assets capital Earned Capital

a. $400,000 $400,000

b. -$18,000

-$18,000

c. -$202,000 -$202,000

Income statement

Transaction Revenue - Expense = Net income

b. $18,000 -$18,000

c. $2,000 -$2,000

8 0

3 years ago

Stanley hart invested in a municipal bond that promised an annual yield of 6.7 percent. the bond pays coupons twice a year. what

shtirl [24]

The effective interest rate is given by

$r= \left(1+\frac{i}{t}\right)^t-1$

Given that the <span>bond yeilds an annual yield of 6.7 percent and pays coupons twice a year.

The effective interest rate is given by:

$r= \left(1+\frac{0.067}{2}\right)^2-1 \\ \\ =(1+0.0335)^2-1 \\ \\ =(1.0335)^2-1=1.0681-1 \\ \\ =0.0681=6.81\%$ </span>

3 0

3 years ago

In the past decade, the dollar value of world trade has ______.

Sergeeva-Olga [200]

Options for this question include:

a. Tripled

b. Remained the same

c. Doubled

d. Declined

___________________________________________________________

World trade has been on the rise in the past decade and as a result, the dollar value of world trade has c. Doubled.

Thanks to more integration, less restrictive government policy, a rise in population and standards of living, world trade has increase over the past couple of decades such that:

Trade in goods has risen from $10 trillion in 2005 to $18.8 trillion in 2019
Trade in services has risen from $2.5 trillion in 2005 to $6 trillion in 2019

When looking at the trade of goods, one can see that trade has almost doubled and in the case of services, close to triple.

We can therefore conclude that world trade has doubled in the past decade.

<em>Find out more at brainly.com/question/14276199.</em>

7 0

3 years ago

Preparing a Cost of Goods Sold Budget Andrews Company manufactures a line of office chairs. Each chair takes $14 of direct mater

Marta_Voda [28]

Answer:

Cost of goods sold = $960,839

Explanation:

Preparing cost of goods sold budget:

Number of units to be sold = 20,000 - 675 = 19,325

As for the information provided:

Direct Materials = $14 $\times$ 19,325 = $270,550

Direct Labor hours = 1.9 $\times$ 19,325 = 36,717.5

Direct Labor Cost = $16 $\times$ 36,717.5 = $587,480

Variable overhead = $1.20 $\times$ 36,717.5 = $44,061

Fixed overhead = $1.60 $\times$ 36,717.50 = $58,748

Therefore, cost of goods sold = $960,839.

6 0

3 years ago

According to the theory of liquidity preference, if the supply of real money balances exceeds the demand for real money balances

Sedbober [7]

Answer:

Sell interest-earning assets in order to obtain non-interest-bearing money

Explanation:

The liquidity preference theory states that investors prefer cash or highly liquid assets to long term assets that carry high risk.

When investors obtain long term assets the charge higher interest rates or premium in order to mitigate associated risk.

In this scenario when the supply of money is higher than demand, there is abundance of non interest bearing money that is highly liquid.

According to the liquidity preference theory investors will sell their interest bearing assets and go for assets with high liquidity (non Interest bearing money)

3 0

3 years ago

Read 2 more answers