The money supply in an economy will decrease if the bank customers decided as a group to pay off their loans and not take out any new loans.
<h3>What is a
money supply?</h3>
In an economy, the money supply refers to the total amount of money that is circulatingb in such economy.
The rate of use of currency, loan instrument, certificates of deposits etc are determines the level of increase or decrease of the level of money supply in an economy.
Therefore, the Option D is correct.
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Each items as a component of Gross Domestic Product (GDP) are:
Consumption:
Investment:
- A domestically manufactured business computer
Government purchases
- A public school teacher's salary
Net export:
<h3>What is Gross Domestic Product (GDP)?</h3>
Gross Domestic Product (GDP) can be defined as the overall value of goods and service that are produced and sold in the market during a particular period of time.
Based on the information given each items as a component of Gross Domestic Product (GDP) are:
Consumption:
- Ice Cream
- 55 cent tacos
- A domestically manufactured personal computer
- Cab fare for personal use
- A ticket to a local sporting event
Investment:
- A domestically manufactured business computer
Government purchases:
- A public school teacher's salary
Net export:
Inconclusion each items as a component of Gross Domestic Product (GDP) are:
Consumption:
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Answer:
Statement which doesn't describe a trail balance is: Option A: Proves that all transactions have been recorded.
Explanation:
A Trial balance lists the accounts and their balances. It is like an internal control made by the accountants to check general ledger's accuracy. It extracts the list of debit and credit balance from the ledger and adds them. They should be equal else some error has been made. These errors might be human. It doesn't prove that company has recorded all its transactions.
So, all statements are correct describing trial balance except Option A.
Answer:
the interest rate will rise
Explanation:
For the nominal GDP to increase, the money supply must have increased. This will lead to a higher inflation rate, which will rise the interest rate. Since the interest rate increased, the price of bonds will decrease. Since the money supply increased, private consumption will increase.
Answer:
B) Is not a contract because there is no consideration for B's promise.
Explanation:
In contract law, consideration is the benefit that must be bargained for between the parties involved. It is the essential reason for the parties entering a contact. Consideration must have some value and is exchanged on the performance or promise from the other party.
Common law rules on contract modifications require some new consideration in order to modify an existing contract. In this case, only B added some new consideration (more money) to the written contract, A didn't add anything new.
