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3 years ago

Write a paragraph that explains the correlation between money supply and economic growth.

Business

2 answers:

serious [3.7K]3 years ago

4 0

Answer:

When the Fed carries on an expansionary monetary policy, increasing the money supply, interest rates should lower. When interest rate decrease, private consumption increases especially through purchases made on credit (e.g. auto loans, home mortgages, greater credit spending, etc.). An increase in private consumption should increase aggregate demand, increasing the gross domestic product (GDP). The problem with expansionary monetary policy is that is also increase the inflation rate which reduces the benefits of the increase in spending.

frutty [35]3 years ago

3 0

The correct answer for this question is this one:
The correlation between money supply and economic growth is directly related because the as the number of money of supply increases, the significance to that with the economic growth is that there is progress. Hope this helps

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A producer with a comparative advantage has the ability to produce a good or service at ________.a. a lower opportunity cost tha

AURORKA [14]

Answer:

The correct answer is option a.

Explanation:

Comparative advantage refers to the situation when an individual, firm or nation, can produce a good or service at a relatively lower opportunity cost than its competitors.

A producer that can produce a good at a lower opportunity cost is said to be specializing in the production of that good.

If a producer can produce a good at a relatively lower cost than any competitor, it implies that the producer has an absolute advantage in the production of that good.

8 0

3 years ago

Below is budgeted production and sales information for Flushing Company for the month of December: Product XXX Product ZZZ Estim

ANTONII [103]

Answer:

b. 502,000 units

Explanation:

- X

Desired Ending 34,000

R1 320,000

R2 180,000

Beginning (32,000)

Production Budget 502,000

$$$Beginning Inventory + Production = Ending Inventory + Sales$

32,000 + P = 34,000 + (320,000 + 180,000)

34,000 + 320,000 + 180,000 - 32,000 = 502,000 = Production

5 0

4 years ago

The McDonald's fast-food restaurant on campus sells an average of 4,000 quarter-pound hamburgers each week. Hamburger patties ar

san4es73 [151]

Answer: 11.42 times

Explanation:

Inventory Turnover = Cost of Goods Sold / Average inventory

Where,

Cost of goods sold = 4,000 quarter-pound hamburgers each week x $1.00 a pound

COGS = $4,000 per week

Average Inventory = 350 pounds of hamburger

Inventory Turnover = 4000 / 350 = 11.42 times

3 0

3 years ago

Stefanie opens a checking account at her neighborhood bank and writes a check on her account. The legal relationship between Ste

Bingel [31]

Answer:

c. An agency relationship

Explanation:

An agency relationship is a mutual relationship, in which one person (i.e the principle ) gives a permission to an agent so as to act on their behalf.

In this relationship the agent must consent to the instructions of the person i.e the principle.

Here in the question, Stefanie acting as Principal who has directed the agent (which is the bank in the given case ) to execute a task.

3 0

3 years ago

Your best friend wants to borrow $2000 from you today for an emergency purchase they need to make that requires a cash payment.

kvasek [131]

Answer:

a. It is not a fair deal for me.

The question is how much is $1,000 today when received in 12 months' time from now. The present value of $1,000 at 5% effective interest rate is $952 ($1,000 * 0.952). The other repayment of $1,100 in 2 years' time from now is worth $997.70 today at the 5% effective interest rate. This implies that my friend is repaying me $1,949.70 in present value terms.

For friendship sake, I may lend her the money, but in economic analysis terms, the NPV value will yield a negative value of $50.30 ($2,000 - $1,949.70). My friend is not actually paying me back the amount I would lend to her. She is paying me less than I actually would lend to her.

b. Cash Flow Diagram:

Year 1 Year 2

F1 F2

$1,000 $1,100 (Inflows)

Fo⇵.................⇵.......................⇵...........................⇵n period

Year 0

$2,000 (outflows)

Explanation:

The cash flow diagram for this loan is the graphical representation of the timing of the cash flows with a clear marking of the repayments made by my best friend in two instalments and the $2,000 that I lent to her. This cash flow diagram presents the flow of cash as arrows on a timeline scaled to the magnitude of the cash flow, where outflows are down arrows and inflows are up arrows.

The Net present value (NPV) of this loan shows the difference between the present value of repayments by my best friend and the present value of $2,000 that I lent to her over a period of 2 years. To obtain this difference, the present values of cash inflows of $1,000 in a year's time and $1,100 in two years' time are determined using the discount factor table based on the given interest rate of 5%.

6 0

4 years ago