Answer:
d) the money supply should grow at a constant rate.
Explanation:
The Federal Reserve System (popularly referred to as the 'Fed') was created by the Federal Reserve Act, passed by the U.S Congress on the 23rd of December, 1913. The Fed began operations in 1914 and just like all central banks, the Federal Reserve is a United States government agency.
Generally, the Fed controls the issuance of currency in United States of America: it promotes public goals such as economic growth, low inflation, and the smooth operation of financial markets.
Monetary growth rule is a theory that was proposed by Friedman and it states that the Federal Reserve System (Fed) should be required to set or target the money supply growth rate to be equal to the growth rate of Real gross domestic product (GDP) each year and leaving the price level of goods and services unchanged.
Basically, this growth rate of gross domestic product (GDP) is usually set between 1% and 4%. Also, the monetary growth rule is also referred to as the K-Percent rule.
Hence, a monetary growth rule means that the money supply should grow at a constant rate.
Answer: False
Explanation:
When the government subsidies production of a good, it leads to a rise in the supply of the good. The supply curve shifts down to the right leading to a <em>fall in the price level</em>. But the <em>equilibrium quantity increases</em>.
Thus, the given statement is false that if the government decides to subsidize the production of a good, the result would be a decrease in the equilibrium price and a decrease in the equilibrium quantity.
Answer:
A. -$272,638
Explanation:
Firstly, we need to calculate the total present value of initial investment plus all operating cost of the project. Then we will use that amount to solve for equal-amount annual operating cost.
Total present value of the project is -689,000 - 41,000/(1+13%) - 41,000/(1+13%)^2 + ... + 41,000/(1+13%)^4, or -810,953.32 (negative sign mean cost).
So, the equivalent annual cost of an oven is -272,638.
The equation solving problem can be made easily using Excel or BA II plus calculator.
Answer:
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment.[4][5] Any item or verifiable record that fulfils these functions can be considered as money.
