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Degger [83]
3 years ago
6

Suppose that each 0.1-percentage-point increase in the equilibrium interest rate induces a $3 billion decrease in real planned i

nvestment spending by businesses. In addition, the investment multiplier is equal to 5, and the money multiplier is equal to 3. Furthermore, every $10 billion decreases in the money supply bring about a 0.1-percentage-point increase in the equilibrium interest rate. Use this information to answer the following questions under the assumption that all other things are equal.
Calculate by how much the real planned investment must decrease if the Federal Reserve desires to bring about a $60 billion decrease in the money supply level.
Business
1 answer:
kirill115 [55]3 years ago
8 0

Answer and Explanation:

(1) Decrease in investment = Decrease in money supply / Investment multiplier

= $60 billion / 5 = $12 billion

Real planned investment will decrease by $12 billion

The Federal Reserve decreased money supply by 60 billion and we wish to determine by how much this would affect real planned investment. We have therefore applied the investment multiplier to determine decrease in real planned investment. This is based on Keynes' theory of investment multiplier

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2. How are school rules similar to state and federal laws? What woud the typical American high school be like if there were no r
jenyasd209 [6]
School rules and government rules are very similar, some similarity are no steeling and drugs and an average high school with no rules would be chaotic. 
7 0
4 years ago
On Jan. 2, Callie Taylor invests $40,000 into the business in exchange for common stock. She journalize the transaction as follo
castortr0y [4]

Answer:

See explanation section.

Explanation:

The correct journal to record this transaction is -

Cash                    Debit          $40,000

Common stock   Credit         $40,000

Note: As Callie Taylor invests the amount in exchange for common stock, An asset (cash) will be increased, and equity (common stock) will be increased. An increase in asset means debit, while an increase in equity means credit.

6 0
3 years ago
Gadget Twin Inc. has an expected net operating profit after taxes, EBIT(I-T), 12,600 million in the coming year. In addition, th
lina2011 [118]

Answer:

$10,670 million

Explanation:

The computation of the free cash flow is shown below:

= EBIT × (1 -Tax Rate) + Depreciation & Amortization - Change in Net operating Working Capital - net capital Expenditure.

= $12,600 million - $0 - $1,890 million - $40 million

= $10,670 million

We simply deduct the increase in net operating capital and the net capital expenditure from the EBIT after tax so that the accurate amount can come

All other information which is given is not relevant. Hence, ignored it

8 0
4 years ago
Direct materials $3,193
crimeas [40]

Answer:

correct option is a. $5,935

Explanation:

given data

Direct materials = $3,193

Direct labor hours  = 21  

Direct labor wage rate =  $12

Machine hours = 166

overhead rate = $15

solution

we get Direct labor that is

Direct labor = 21  × $12

Direct labor = 252

and

manufacturing overhead is

manufacturing overhead = 166 × $15

manufacturing overhead  = 2490

so here total cost will be

total cost = Direct materials + Direct labor + manufacturing overhead  ............1

Total cost =  $3,193  + $252 + $2490

Total cost = $5935

so correct option is a. $5,935

8 0
3 years ago
Read 2 more answers
Multiply 3.85% x $45,076 *
BaLLatris [955]
I figured this out so the answer is 173542.6
5 0
3 years ago
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