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ra1l [238]
3 years ago
9

If the nominal exchange rate between the US dollar and the Canadian dollar is C $ 0.89 to the US dollar, how many dollars is req

uired to buy a $ 2.5 CAD product?Describe and explain the tools used by the central bank to reduce money supply.
Business
1 answer:
Olin [163]3 years ago
3 0

Answer:

1) 2.8 USD

2)There are several methods:

1) Modifying Reserve Requirements

2) Changing Short-Term Interest Rates

3) Conducting Open Market Operations

Explanation:

I) First of all, the nominal exchange rate describes how much foreign currency can be exchanged for a unit of domestic currency, but the real exchange rate indicates how much the goods and services in the domestic country can be exchanged for the goods and services in a foreign country.

If 1USD=0.89CAD, then 1 CAD=1/0.89=1.12USD

Then 2.5 CAD = 2.5*1.12= 2.8 USD so we will need 2.8 USD to get 2.5 CAD.

II) As we know, the movement of the money supply is the responsibility of the monetary policy activities by central banks. There are several methods:

1) Modifying Reserve Requirements: means that it is possible to influence by modifying the reserve requirements to increase or decrease the money supply. More deeply, this modification refers to the amount of funds banks have to keep against deposits in bank accounts. By lowering the reserve requirements, banks are able to loan more money, which grow the overall supply of money in the economy. Conversely, by increasing the banks' reserve requirements, it will be possible to decrease the size of the money supply.

2) Changing Short-Term Interest Rates: means that it is possible to change the interest rates in short terms to alter the money supply. It’s all about the changing the discount rates. By lowering the rates, it is possible increase the money supply and boost economic activity.  

3) Conducting Open Market Operations: means that it is possible to increase or decrease the money supply conducting open market operations, which affects the funds rate. So the authority who deals with the monetary policy buys and sells government securities in the open market. If the authority wants to increase the money supply, it will purchase government bonds as a result this supplies the securities dealers who sell the bonds with cash, increasing the overall money supply. However, if the authority wants to decrease the money supply, it will send bonds from its account, thus taking in cash and removing money from the economic system as a result, adjusting the funds rate is a heavily anticipated economic event.

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myrzilka [38]

the answer is d. discretionary changes in government spending and taxes

5 0
3 years ago
A profit-maximizing firm operates in purely competitive product and resource markets, with the following resource and production
andrew11 [14]

Answer:

b) 5

Explanation:

W TP MP MRP

1 100  

2 190 90 900

3 270 80 800

4 340 70 700

5 400 60 600

6 450 50 500

7 490 40 400

8 520 30 300

the marginal product of n labor = (total product of n labor - the total product of p labor)/(n-p)............(n>p)

Marginal revenue product = marginal product*price

the firm employ input up to marginal revenue product equal to the wage

MRP = wage or closest lower wage

where W = 5

the firm will higher 5 workers.

7 0
3 years ago
Read 2 more answers
ring its first five years of operations, Della Manufacturing reports net income and pays dividends as follows. Year Net Income D
miv72 [106K]

Answer: See explanation

Explanation:

The retained earnings will be calculated as:

= Begining retainers earnings + Net income - Dividend.

Year 1:

Retained earning = 0 + 2000 - 1700

= 300.

Year 2:

Retained earning = 300 + 2600 - 1600

= 1300

Year 3:

Retained earning = 1300 + 2600 - 2200

= 1700

Year 4:

Retained earning = 1700 + 5900 - 2900

= 4700

Year 5:

Retained earning = 4700 + 8800 - 3100

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3 0
3 years ago
The United Nation of Zorwaya has strict restrictions on direct investment by foreign enterprises, and it opposes the establishme
max2010maxim [7]

Answer:

These are the options for the question:

A) deregulation  

B) socialism    

C) totalitarian ideologies

D) command economies

And this is the correct answer:

A) deregulation  

Explanation:

According to the information in the question, the nation of Zorwaya is regime where political leadership has tight control over economic matters. The highest authority controls both prices and production (a staple of socialism and planned economies), and opposes most foreign investment, only allowing it after strict scrutiny and tight control.

In this nation, political leadership would oppose deregulation because this would reduce their power over the economy. Deregulation would likely mean easening price controls, allowing production to flow more freely, or lifting restrictions to foreign capital, things that Zorwaya's leaders oppose.

6 0
3 years ago
A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted c
Mila [183]

Answer:

$4.00

Explanation:

To calculate the approximate overhead cost per unit of product A1 under activity - based costing we have it as

Activity 1 allocated to Product B2 line we have as

$48,000 × 4,800/6,000

= $38,400

Activity 2 allocated to Product B2 line we have it as

= $63,000 × 4,760/7,000

= $42,840

Activity 3 allocated to Product B2 line we have it as

=$80,000 × 800/8,000

= $8,000

Total overhead allocated to Product B2 = $89,240

Overhead per unit of Product B2: $89,240/22,310 = $4.00

As our overhead unit of product

4 0
3 years ago
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