Answer:
Excess reserves
Explanation:
Money supply in the economy is regulated by the central bank of Federal Reserve through various methods.
One of them is the use of reserve ratio.
Reserve ratio is the percentage of total deposit in a bank that commercial banks are required to keep aside and not use.
If there is no excess reserves and the Fed lowers required reserve ratio, it means banks will now have more money they can use to service customers.
The excess excess of the reserve can now the used to give out loans
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
The unemployed people in this economy are MASON AND ABBOT.
Unemployment is said to occur in an economy, when people who are in the working age bracket actively search for work for a long time without getting any. There are different types of unemployment. Unemployment rate is usually used to gauge how healthy an economy is. In the scenario given above, it can be seen that both Mason and Abbot are of working age and they are both actively searching for work without finding one. <span />
Answer:
274.7%
Explanation:
The total amount that Eric will borrow will be = 43114311+33503350+13391339 = 90009000.
Now to calculate WACC, we will apply the WACC formula:
WACC = (43114311/90009000)*0.66 + (33503350/90009000)*0.88 + (13391339/90009000)*14.14
Hence,
WACC = 274.74%
The solution was very simple, we just applied the WACC formula by taking the total amount of debt in the denominator of each of the loans taken and multiplied it by the interest rate on which it is taken.
Hope this helps, although I think the values in the question are not correct, but nonetheless I have provide the correct solution according to the given values.
Thanks.
