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user100 [1]
3 years ago
12

Which of the following is likely to happen if the Fed buys Treasury securities from banks?a. interest rate rises; investment fal

lsb. interest rate rises; investment risesc. interest rate falls; investment risesd. interest rate falls; investment falls
Business
1 answer:
gayaneshka [121]3 years ago
5 0

Answer: c. interest rate falls; investment rises

Explanation:

The Fed buying treasury securities from banks is an expansionary policy when the government wants to increase the money in circulation and increase economic growth.

When the Fed buys Treasury securities from banks, this will lead to availability of funds as prices will be pushed higher and there will be a reduction in the interest rate.

Since there is reduction in interest rate, investment will increase as investors will borrow from banks.

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Suppose that Dillon derives 40 utils of total utility from eating 5 hotdogs and 42 utils of total utility from eating 6 hotdogs.
gavmur [86]

Answer: The marginal utility is 2

Explanation:

Utility is the satisfaction derived from the consumption of a particular commodity. Total utility is the total satisfaction derived from the consumption of a particular commodity. Marginal utility is the extra satisfaction that a consumer gets from consuming a product. Utility is measured in utils.

Marginal utility increases with an extra consumption of a good at first but later it begins to reduce as the extra good consumed doesn't really have give the consumer enough satisfaction anymore.

Regarding the question, eating 5 hotdogs gives 40 utils and eating 6 hotdogs gives 42 utils.

The marginal utility is the extra utils which will be 42-40 which gives 2 utils.

3 0
3 years ago
Marginal productivity theory assumes that a worker’s income is a function of the contribution of that worker to the value of the
Dmitriy789 [7]

Marginal productivity theory assumes that a worker’s income is a function of the contribution of that worker to the value of the output. in business, this is called the "value-added" approach.

There is a correct theory called marginal productivity theory. Wages are paid at a level equal to the marginal revenue product of labor, the MRP (value of the marginal product of labor). MRP is the increase in income caused by the increase in output produced by the last employed worker.

The marginal productivity theory of income distribution proposes that each individual should receive income based on their contribution to total output. The marginal productivity theory of income distribution has been criticized for the following reasons. Income from inheritance is inconsistent with the theory.

Learn more about Marginal revenue here: brainly.com/question/13617399

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7 0
2 years ago
If $ 9 comma 000 is invested in a certain business at the start of the​ year, the investor will receive $ 2 comma 700 at the end
Marianna [84]

Answer:

PV= $9,355.78

Explanation:

Giving the following information:

If $ 9,000 is invested in a certain business at the start of the​ year, the investor will receive $ 2,700 at the end of each of the next four years.

Interest rate= 6%.

First, we need to find the final value

FV= {A*[(1+i)^n-1]}/i

A= payment

FV= {2,700*[(1.06^4)-1]}/0.06= 11,811.46

Now, we calculate the present value:

PV= FV/(1+i)^n

PV= 11,811.46/1.06^4= $9,355.78

4 0
3 years ago
a new hockey arena at a cost of $2,500,000. It received a downpayment of $500,000 from local businesses to support the project a
mylen [45]

Answer:

a. Prepare the journal entry to record the issuance of the bonds on January 1, 2018

we must first determine the market price of the bonds:

PV of face value = $2,000,000 / (1 + 5%)²⁰ = $753,778.97 ≈ $753,779

PV of coupon payments = $110,000 x 12.462 (PV annuity factor, 5%, 20 periods) = $1,370,820

market value of the bonds = $753,779 + $1,370,820 = $2,124,599

January 1, 2018, bonds are issued at a premium

Dr Cash 2,124,599

    Cr Bonds payable 2,000,000

    Cr Premium on bonds payable 124,599

b. Prepare a bond amortization schedule up to and including January 1, 2022

since we are not told which amortization method to use, I will use the straight line method.

Date           Interest        Cash              Premium          Carrying

                  expense      paid               amortization     value

7/2018        $103,770     $110,000       $6,230             $2,118,369

1/2019         $103,770     $110,000       $6,230             $2,112,139

7/2019        $103,770     $110,000       $6,230             $2,105,909  

1/2020        $103,770     $110,000       $6,230             $2,099,679    

7/2020       $103,770     $110,000       $6,230             $2,093,449

1/2021         $103,770     $110,000       $6,230             $2,087,219  

7/2021        $103,770     $110,000       $6,230             $2,080,989                              

1/2022        $103,770     $110,000       $6,230             $2,074,759                                

c. Prepare the journal entries to record the interest payments on January 1, 2020 and January 1, 2021.

bond premium amortization per coupon = 124,599 / 20 = $6,229.95 ≈ $6,230

January 1, 2020, coupon payment

Dr Interest expense 103,770

Dr Premium on bonds payable 6,230

    Cr Cash 110,000

January 1, 2021, coupon payment

Dr Interest expense 103,770

Dr Premium on bonds payable 6,230

    Cr Cash 110,000

d. Prepare the journal entry to record the bond called on January 2021 at 106

Dr Bonds payable 2,000,000

Dr Premium on bonds payable 87,219

Dr Loss on retirement of debt 32,781

    Cr Cash 2,120,000

5 0
3 years ago
Safety Supply Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Toxic Recovery, Inc
Vedmedyk [2.9K]

Answer:

A is the correct option

Explanation:

Free On Board Destination is also known as FOB. It means that the buyer will take the delivery of the goods which is being shipped by the supplier once the good arrives at the supplier's dock. The four variations of FOB destination terms are Freight prepared and allowed, freight prepared and added, freight collect, freight collect and allowed. The terms of FOB  get superseded if the customer elects to override the terms with customer arranged pickup. In FOB destination terms the seller pays the shipping charges.

7 0
3 years ago
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