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3 years ago

What happens to consumption and investment spending when the Federal Reserve decreases the money supply

Business

1 answer:

Illusion [34]3 years ago

3 0

Answer: Consumption and investment spending decrease or falls.

Explanation:

When the Federal Reserve decreases the money supply, this will lead to a fall in the consumption and investment spending. This is a contractionary policy by the government which is typically used to curb inflation.

Since there's reduction in money supply, there'll be less money in circulation and hence, decrease in consumption and investment expenditure.

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Wage contracts, efficiency wages, and the minimum wage are explanations for why:

hjlf

Answer:

B. Wages tend to be inflexible downward

Explanation:

Wages are flexible if they react to changes in demand and supply. Profitability determines demand and supply level for wages. Flexibility in wages means that If the economy is performing well, companies should compensate their employees better.

Wage inflexibility implies that wages will not respond to changes in demand and supply. Wages do not rise or fall if the marginal productivity of labor increases or decreases. Wage contracts are agreements that tend to set compensation for workers regardless of their output. Minimum wage is a regulatory requirement that demands workers not to be paid below a set rate. Wage efficiency recommends higher than market rate compensation to motivate productivity.

The three factors do not advocate for wages to be pegged on productivity.

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3 years ago

On January 1, 2007, Nichols Company's inventory of Item X consisted of 2,000 units that cost $8 each. During 2007 the company pu

timama [110]

Answer:

For the cost of goods sold, the company made around $42,435

Explanation:

Solve cost of goods for Jan. 1st:

2000 units × $8

$16,000

Solve for cost of goods during 2007:

5000 units × $10

$50,000

Use the formula for weighted-average cost:

WAC per unit = cost of goods available for sale / units available for sale

WAC per unit = 16,000 + 50,000 / 2000 + 5000

WAC per unit = 66,000 / 7000

WAC per unit = 9.42857..... I will round to a dollar value

WAC per unit = 9.43

For cost of goods <em>sold</em>:

4,500 × 9.43 (please keep in mind 9.43 is a rounded number)

$42,435

8 0

2 years ago

Read 2 more answers

A cosmetics company is planning the introduction and promotion of a new lipstick line. The marketing research department has fou

Bad White [126]

Answer is in the attachment

6 0

2 years ago

In the dehydration of cyclohexanol what step was most important in maximizing product formation

Arisa [49]

In the dehydration of cyclohexanol, the most important step for maximizing product formation is the step two of the reaction, which is the rate determining step of the reaction.

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2 years ago

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On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following i

lukranit [14]

Answer:

Using the gross profit method, the cost of goods sold would be:

$42,500

Explanation:

Gross margin ratio of the company is 15%. Refer the formula:

Gross margin = Gross profit/Revenue (or net sales)

= (Net sales- Cost of good sold)/Net sales

Using the gross profit method and from the formula,

Cost of good sold = Net sales - Net sales x Gross margin

= Net sales x (1 - Gross margin)

= $50,000 x (1-0.15) = $50,000 x 0.85 = $42,500

6 0

3 years ago