Answer(1)
<em>b. interest rate at which banks can borrow reserves from the Federal Reserve</em>
Explanation:
The discount rate is known in America as the rate of interest which a central bank charges on its loans and advances to a commercial bank. This loans and advances are from the federal reserve.
Answer (2)
<em>a. more reserves, causing an increase in lending and the money supply</em>
Explanation:
Excess lending from the national reserve due to a lowered discount rate will lead to a reserve supply excess into commercial banks throughout the economy and expands the money supply .
Fluctuation in economic activity
Answer:
$67.2
Explanation:
With regards to the above,
Total unit cost = $15 + $9 + $6 + $8 + $4 + $6 = $48
Target selling price = Total unit cost × (1 + mark up)
Since markup percentage is 40% or 0.40
Therefore,
Target selling price = $48 × (1 + 0.4)
= $48 × 1.4
= $67.2
Therefore the target selling price is $67.2
Answer:
Increase by more than $500 billion.
Explanation:
Use the below formula to find the multiplier effect.
Multiplier = 1 / (1-MPC)
Multiplier = 1 / (1 - 0.8)
Multiplier = 1 / 0.2
Mulitiplier = 5
GDP increase by = 5 x 100
GDP increases by = $500
Since the multiplier is five and the increase in transfer by $100 that will have multiplier effect of $500. Thus option "a" is correct.
