1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
dsp73
3 years ago
11

Suppose the Fed decides it needs to pursue an expansionary policy. Assume people hold no cash, the reserve requirement is 50 per

cent, and there are no excess reserves. Show how the Fed would increase the money supply by $1 million through open market operations. Instructions: Enter numeric responses as whole numbers. Because the current money multiplier is , the Fed would $ worth of bonds, the monetary base and so increasing the money supply by $1 million.
Business
1 answer:
DENIUS [597]3 years ago
6 0

Answer:

Because the current money multiplier is <u>2</u>, the Fed would <u>BUY $500,000</u> worth of bonds, <u>INCREASING</u> the monetary base and so increasing the money supply by $1 million.

Explanation:

if the Fed wants to increase the money supply by $1 million, then it would need to purchase US securities worth $500,000. The formulas used to calculate the impact of the Fed's operations are:

increase in money supply = additional funds x money multiplier

  • money multiplier = 1 / reserve ratio = 1 / 50% =  2
  • desired increase in money supply = $1 million

$1,000,000 = additional funds x 2

additional funds = $1,000,000 / 2 = $500,000

You might be interested in
Select the examples that best demonstrate likely tasks for Science and Math workers.
Kazeer [188]
A, B, and C would best demonstrate the tasks.
7 0
2 years ago
Vonda and Aleiyah are shopping together at the mall for new jeans. Vonda is willing to pay $90 and Aleiyah is willing to pay $50
Gala2k [10]

Answer:

A. $60

Explanation:

Recall that, consumer's surplus refers to the price that a consumer is willing to pay less the amount he or she actually pays.

Thus

Consumer surplus = maximum price willing to pay - actual market price.

Given that

Market price = $40

Vonda is willing to pay = $90

Aleiyah is willing to pay = $50

Hence.

Vonda consumer surplus = 90 - 40

= $50

Aleiyah consumer surplus = 50 - 40

= $10.

Total consumer surplus = 50 + 10

= $60.

8 0
3 years ago
Ratio analysis:___________.
Mnenie [13.5K]

Answer:

D. Serves as an initial evaluation of the adequacy of an investment's expected cash flows.

Explanation:

Ratio analysis serves as an initial evaluation of the adequacy of an investment's expected cash flows.

Ratio analysis can be defined as the analysis of different pieces of financial information in the financial statements of a business.

Ratio analysis is used to get insight about the financial wellbeing of a business. It is used by analysts to determine various aspects of a business, such as its profitability, liquidity, and solvency.

7 0
2 years ago
A primary difference between macroeconomics and microeconomics is
sleet_krkn [62]

'Micro is the study of individuals and business decisions while macroeconomics while macro studies the decisions of the governments and countries.'

Microeconomics examines individual markets while macroeconomics examines the economy.

6 0
2 years ago
Suppose at her current level of consumption, a person enjoys going to an additional baseball game three times as much as seeing
AleksAgata [21]

Answer:

The person is NOT spending her income for both goods in a manner that maximizes her satisfaction.

Explanation:

Based on the information given The person is NOT spending her income for both goods in a manner that maximizes her satisfaction which means that she would have to INCREASE baseball games consumption and DECREASE movies consumption reason been that we were told that an individual enjoys going to baseball game three times compare to seeing new movie which therefore means The price of the ticket for a baseball game which is the amount of $30 should be increase while the price of a ticket for a movie which is the amount of $15 should be decrease.

3 0
2 years ago
Other questions:
  • The going concern assumption of GAAP implies that the firm: __________
    11·1 answer
  • Interest versus dividend expense Michaels Corporation expects earnings before in- terest and taxes to be $50,000 for the current
    11·1 answer
  • Sales decline in the decline stage of the PLC because of technological advances, shifts in consumer tastes and preferences, and
    9·1 answer
  • New ________________ can improve economic activity provided that production costs are reduced and the economy can absorb those w
    6·1 answer
  • According to the Katznelson text, large corporations have disproportionate political power mainly because ___.
    7·1 answer
  • During 2017, Ecuyer Industries reported cash provided by operations of $794,000, cash used in investing of $686,000, and cash us
    10·1 answer
  • Sidewinder, Inc., has sales of $634,000, costs of $328,000, depreciation expense of $73,000, interest expense of $38,000, and a
    12·1 answer
  • You are a management accountant for Time Treasures Company, whose company has recently signed an outsourcing agreement with Spot
    12·1 answer
  • The federal budget starts on October 1 of a calendar year and ends on September 30 of the following calendar year. TRUE FALSE
    12·1 answer
  • What is a database query?
    9·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!