Baldwin’s product Bold has material costs that are rising from $6.80 to $7.80. Assume that period costs and other labor costs re
main unchanged. If Baldwin decides to absorb the cost and not pass any on to its customers in the form of raised prices how many units of product Bold would need to be sold next round to break even on the product?
1 answer:
You might be interested in
Missing information:
total deposits in bank XYZ = $4,000,000
total reserves = $3,800,000
Answer:
the required reserve = $250,000
excess reserves = $4,550,000
Explanation:
required reserve ratio = 5%
the Fed buys $1,000,000 worth of bonds
the $1,000,000 are deposited entirely in bank XYZ
total checkable deposits will increase to $5,000,000
the required reserve = $5,000,000 x 5% = $250,000
excess reserves = total checkable deposits - total loans - required reserves = $5,000,000 - $200,000 - $250,000 = $4,550,000
