1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
sdas [7]
3 years ago
9

Suppose the Fed purchases $100 million of U.S. securities from security dealers. If the reserve requirement is 20 percent, the c

urrency holdings of the public are unchanged, and banks have zero excess reserves both before and after the transaction, the total impact on the money supply will be a:A. $100 million increase in the money supply.B. $100 million decrease in the money supply.C. $200 million increase in the money supply.D. $500 million increase in the money supply.
Business
1 answer:
Alja [10]3 years ago
7 0

Answer:

Option (D) is correct.

Explanation:

Given that,

Amount of securities purchased = $100,000,000

Reserve requirement ratio = 20 percent

Money multiplier:

= 1 ÷ Reserve requirement ratio

= 1 ÷ 0.20

= 5

Increase in money supply:

= Money multiplier × Amount of securities purchased

= 5 × $100,000,000

= $500 million

Therefore, the total impact on the money supply will be a $500 million increase in the money supply.

You might be interested in
What is it called where consumers react to rising prices by consuming less of a good and more of it's competitors?
adelina 88 [10]

Answer:

Substitute Effect

Explanation:

When a product's price increases, it becomes relatively expensive compared to its alternatives. The high price will encourage consumers to choose other goods that are relatively cheaper. Consequently, the price increase reduces the demand for the product while increases the demand for its substitutes.

The substitution effect describes how consumption is affected by an increase or a decrease in a product's price.

6 0
3 years ago
Perez, Inc. owns 80% of Senior, Inc. During Year 1, Perez sold goods with a 40% gross profit to Senior. Senior sold all of these
den301095 [7]

Answer:

B) Sales and cost of goods sold should be reduced by the intercompany sales.

Explanation:

When a parent company consolidates its financial statements with its subsidiaries, it has to eliminate all the transactions involving intercompany sales.

In this case, Perez Inc. must adjust its consolidated financial statements by reducing the sales revenue and COGS of the transaction it made with Senior Inc. (its subsidiary).

4 0
3 years ago
On May 7, Jernigan Company purchased on account 510 units of raw materials at $18 per unit. During May, raw materials were requi
Paladinen [302]

Answer and Explanation:

The journal entry to record the purchase is shown below;

Materials (510 units × $18) $9,180

          To Accounts payable $9,180

(To record the purchases)

Here the material is debited as it increased the assets and credited the account payable as it also increased the liabilities

Therefore the above journal entry should be passed

3 0
3 years ago
Nessca solutions inc. has recently created a hardware and software system for transmitting data among different departments with
dmitriy555 [2]
The answer is: Technology and planning integration
Technology and planning integration refers to the use of modern technology in order to achieve company's goals more efficiently.
Not only that, implementing technological assistance will lower the total cost made by the company in the long run.

8 0
3 years ago
Suppose the tax rate on the first​ $10,000 income is 0​ percent; 10 percent on the next​ $20,000; 20 percent on the next​ $20,00
olasank [31]
  <span>Family A: marginal rate 20%, average rate 10%</span><span> 

Family B: marginal rate 40%, average rate 23% </span><span>

The marginal tax rate is the rate paid on the last dollar of income; this would be whatever tax bracket the family is in. The average price is the total tax divided by the total revenue. </span><span>

Family A: </span><span>
</span><span>
total income $40,000: this includes $10,000 at 0%, $20,000 at 10% (tax of $2,000), and $10,000 at 20% (tax of $2,000). The last rate paid is 20% so that is the marginal rate; the total tax paid is $4,000, divide that by $40,000 total income, that is the average rate. </span><span>

Family B: </span><span>
</span><span>
total income $100,000: this includes $10,000 at 0%, $20,000 at 10% (tax of $2,000), $20,000 at 20% (tax of $4,000), $30,000 at 30% (tax of $9,000), and $20,000 at 40% (tax of $8,000). The last rate paid is 40% so that is the marginal rate; the total tax paid is $23,000, divide that by $100,000 total income, that is the average rate.</span>
5 0
3 years ago
Other questions:
  • 5. Which of the following examples of emotional behaviors are displayed by infants up to 8 months?
    15·2 answers
  • What most likely caused the steady increase in price per barrel of oil between 2001 and 2008? a global recession scarcity of pet
    5·2 answers
  • Opal asks Paolo, who does not understand English, to sign what Opal says is an application to open a bank account. In fact, the
    8·1 answer
  • What are basic features of Usenet groups?
    7·1 answer
  • Assuming no direct factory overhead costs (i.e., inventory carry costs) and $3 million dollars in combined promotion and sales b
    11·1 answer
  • You are in a store and see two sheets for sale. Each is labeled "200 Percale." What differences in construction could there be b
    13·1 answer
  • Normative and positive statements
    6·1 answer
  • Why might a someone organize his or her business as a sole proprietorship?
    8·1 answer
  • What will happen to the equilibrium price and quantity of Romaine Lettuce if a new fertilizer increases yields and makes the let
    14·1 answer
  • Answer these questions as though you are preparing an audience profile for an essay about a favorite television show. what do my
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!