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shepuryov [24]
4 years ago
10

Suppose that the reserve requirement for checking deposits is 16 percent and that banks do not hold any excess reserves. If the

Fed sells $2 million of government bonds, the economy's reserves by $ million, and the money supply will by $ million.
Business
1 answer:
forsale [732]4 years ago
5 0

Answer:

Decreases by $2 million; Money supply decreases by $12.5 million

Explanation:

Given that,

Required reserve ratio = 16 percent

Government bonds sold by Fed = $2 million

Therefore, the economy's reserve decreases by:

= Change in money supply × Required reserve ratio

= $12.5 million × 0.16

= $2 million.

Money multiplier = 1 ÷ Required reserve ratio

                            = 1 ÷ 0.16

                            = 6.25

Money supply decreases by:

= Money multiplier × Decline in reserves

= 6.25 × $2 million

= $12.5 million

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When one starts small and grows however, they will be able to deal with problems as they come and gain the experience necessary to overcome such problems.

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The actual cost of direct labor per hour is $14.75. Two and one half standard direct labor hours are allowed per unit of finishe
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Answer:

Standard Rate per hour = $15.5 per hour

Explanation:

given data

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to find out

standard direct labor rate per hour

solution

we use here Direct Efficiency Variance formula that is  

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