The action of the bank will put decreased pressure on the money supply, and to reduce the impact of this action, the Fed could decrease the discount rate.
Basically, a decrease in discount rate will make it easy and cheaper for commercial banks to borrow money from Federal Reserve System and thus, results to increase in available credit and lending in the economy
Therefore, if the commercial banks decide to increase their holdings of excess reserves supposed to be remitted to Feds, then, this will put <u>decreased</u> pressure on the money supply, and the Fed would act by <u>decreasing</u> the discount rate.
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Answer:
$400 .Since inventory is valued at cost or market value(current replacement cost) whichever is lower .
Therefore value of inventory : $400*8=$3200
Explanation:
Answer: Option (C) is correct.
Explanation:
National Savings is divided into two parts, private savings and public savings.
Private Savings = GDP - Taxes + Transfer payments - Consumption Spending
= Y - T + TR - C
= 12 - 3 + 2 - 9
= $ 2 trillion
Public Savings = Taxes - Government Spending - Transfer payments
= 3 - 0 - 2
= $1 trillion
∴ Option (C) is correct.
Private saving = $2 trillion and public saving = $1 trillion.
Rational choice theory states that individuals rely on rational calculations to achieve outcomes that are in line with their personal objectives. These decisions provide people with the greatest benefit or satisfaction — given the choices available — and are also in their highest self-interest.
Answer: The market demand curve for soft drinks will shift to the left and the market supply curve will shift to the left as well: equilibrium quantity will decrease and the equilibrium price may rise, fall, or remain the same. The graphs below illustrate this idea.
Explanation:
