Answer:
A. YES
B. YES
C. YES
D. NO
E. YES
F. YES
Explanation:
The U.S. Treasury maintains accounts at commercial banks. What would be the consequences for the money supply if the Treasury shifted funds from one of those banks to the Fed? Answer yes or no to each of the following:
A. The decrease in reserves would also appear on the Fed's balance sheet, but would be offset by an increase in the government's account YES, because the amount was debited on the Federal Reserve Balance Sheet when the money was transfered to the commercial bank in question.
B. The balance sheet for the bank would reflect a decrease in reserves and a decrease in deposits YES because that was a debit transaction for the bank but a Credit transaction for the Federal Reserve.
C. The decline in bank reserves would decrease the quantity of money in the vault. YES, because a decline in the reserve will reduce the quantity of money in vault and in circulation because the Federal Reserve has used Open Market Operation (OMO) to regulate the volumes and velocities of money in circulation.
D. The balance sheet for the bank would reflect an increase in reserves and an increase in deposits - NO. This is because Balance sheets give at a glance financial status of banks. Therefore, there cannot be an increase in the Fictitious Assets when there was a withdrawl or transfer of funds.
E. The increase in reserves would also appear on the Fed's balance sheet, but would be offset by a decrease in the government's account, YES. This is true since the transfer to the Fed has shown increase in the Balance Sheet while the decrease will result in funding statutory expenses of the Government during allocation of funds to the MDAs.
F. The rise in bank reserves would increase in the quantity of money. YES. Definitely, the rise in the bank reserves will increase the volume of money in ciits vault and circulation because the Federal Reserve as an economic policy at the time of its introduction wants more liquidity (money) in the economy. It is an expantionary measure by the Federal Reserve.
Answer:
$88,820
Explanation:
The computation of the cost of the machine is shown below:
= List price - discount allowed + transportation + sales tax paid + installation cost
where,
List price is $83,000
Discount allowed
= $83,000 × 5%
= $4,150
And, the other items would remain the same
So, the cost of the machine is
= $83,000 - $4,150 + $2,600 + $5,720 + $1,650
= $88,820
All other expenses should be ignored as it is not relevant
Answer:
Yes
Explanation:
Since in the question it is mentioned that the product recall is probable and predicted that the cost to the company is $2.8 million so this represent the contingent liability as it is probable & estimated
So the same should be disclosed and reported
Hence, the answer should be yes
The same is to considered relevant
Answer:
With specialization Iran will be able to consume 1.7 bottles of olive oil.
Explanation:
Iran produces 4 barrels of oil and 6 bottles of olive oil.
Iraq produces 4 barrels of oil and 4 bottles of olive oil.
The opportunity cost of producing a barrel of oil for Iran
= 
= 1.5
The opportunity cost of producing a barrel of oil for Iraq
= 
= 1
Iraq has a lower opportunity cost for producing oil so we can say it has a comparative advantage in producing oil.
The opportunity cost of producing a barrel of olive oil for Iran
= 
= 0.66
The opportunity cost of producing a barrel of olive oil for Iraq
=
= 1
Iran has a lower opportunity cost for producing olive oil so we can say it has a comparative advantage in producing it.
The terms of trade with specialization are 4 barrels of oil for 4.3 bottles of olive oil, and that 4 barrels of oil are indeed traded for 4.3 bottles of olive oil.
Without trade, Iran is consuming 4 barrels of oil and 6 bottles of olive oil.
With specialization, Iran will be able to consume
= 6 - 4.3
= 1.7 bottles of olive oil
Answer:
If the effective tax rate increases then the net savings coming from investments will get lowered as a result the investment will have higher payback period (The increase in effective tax rate would lower demand of the product which means there is decline in net saving arising from the sale of the product). Likewise this decrease in annual net savings will also decrease the internal rate of return which shows that their are increased chances of project rejections. The NPV method is based on cash flows and relevant costing just like IRR and payback method but the only difference is that it assumes that the cash earned would be reinvested at cost of capital. The NPV will also decrease due to increased effective tax rate.
