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stepan [7]
3 years ago
7

How do banks create money?

Business
1 answer:
Dafna11 [192]3 years ago
5 0

Answer:

Commercial banks, required reserve, loans, deposits, create.

Explanation:

The main function of commercial banks is to accept deposits and then to lend the same money (minus required reserves) back out. Banks make a profit by charging a higher interest rate on loans than the interest rate they pay on deposits. Through the loan process, banks are actually able to create money.

The major function of commercial banks is

1. Accepting deposits from people and business organzations.

2. Giving loans to Customers to be paid at a specific period of time at an agreed interest rate.

Required reserve is the minimum amount of money which in required for a commercial Bank to hold/save out of every deposit. If the required reserve is 10% of every deposit, a customer customer deposited $100. The required will be $10 which the bank will hold. The remaining $90 is the balance which banks can loan out to Customers.

Commercial Banks make profit by charging a higher interest rate on loan and lower interest rate on deposits. For example: 7.5% interest rate on loan and 2.5% interest rate on deposits. The 5% difference is the bank Profit.

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After the World Cup soccer games, Puma, the German sporting goods manufacturer, increased its end-of-year sales target by $641 m
Leokris [45]

Answer:

tactical

Explanation:

"Planning" is a very important process in order for a business to know how it is going to allocate and manage its resources to achieve its goals in a more <em>organized way. </em>

Among the planning options mentioned, Puma uses "tactical plans" in order to achieve its goal. Such type of plan is focused on a specific goal. In the case of Puma, it is focused on achieving $641 million in its<u> sales target.</u>

Tactical plans also include "when" or the time in which goals are going to be achieved. Most of the time, goals are set from less than a year to one year. In Puma's case, it's goal is <u>by the end of the year. </u>

Tactical plans also state the<em> strategies</em> that the company will use in order to achieve its goal. In order for Puma to increase its sales, it will be<em> introducing new products, sell soccer equipment and combine different subsidiaries.</em> These strategies will help Puma accomplish its mission.

So, this explains the answer.

7 0
3 years ago
Why don’t more companies create disruptive innovations? more than one answer may be correct.
Tanzania [10]

It is  because they are not profitable enough at first and because their development can take scarce resources away from sustaining innovations.

<h3>What does the term "disruptive innovation" mean?</h3>

It disrupts the market leader in that specific market space and fundamentally alters the industry when a new good or service is launched into an established market that performs better and typically costs less.

<h3>What exactly qualifies as a disruptive invention?</h3>

The usage of cellphones for computing purposes, such as web browsing and streaming, rather than laptops and desktop computers is another example of disruptive innovation. Thanks to technical breakthroughs, cell phones today have tiny CPUs, circuits, and software that support these functionalities.

To know more about  Disruptive innovations visit:

brainly.com/question/15100569

#SPJ4

6 0
1 year ago
Marshall owns and operates a construction firm. he uses inexpensive and low-grade building products and accepts inferior carpent
kondor19780726 [428]

<u>The answer is "No".</u>


Legal compliance is regarded as a moral minimum (The base level of moral conduct expected of a business firm, which is normally characterized as consistence with the law) the base worthy standard for moral business conduct.

Business firms are liable to broad government control, practically every activity a firm attempts.

Business chiefs need to continue with alert and assess and activity and its results from a moral point of view.

8 0
4 years ago
In its 20X3 financial statements, Cris Co. reported interest expense of $85,000 in its income statement and cash paid for intere
IgorLugansk [536]

Answer:

The answer is: D) $32,000

Explanation:

In 20x3, Cris. Co. paid in cash $68,000 for interest, including $15,000 of interest from 20x2.

The amount of cash paid for 20x3 interests = $68,000 - $15,000 = $53,000

Interest payable = interest expense 20x3 - cash paid for 20x3 interests

interest payable = $85,000 - $53,000 = $32,000

3 0
3 years ago
The following information was drawn from the annual reports of two companies. Company A Company B Sales revenue $ 1,000 $ 2,000
grandymaker [24]

Answer:

c.45%

Explanation:

The Formula for return on sales=Operating profit/Net Sales

Sales=$2,000

Less:

Cost of Goods Sold $ (1,100)

Operating profit $900

Return on sales=$900/$2,000=45%

It should be noted that in many cases to reach out on operating profit, the operating expense are also deducted from operating profit for the sake of this formula. In that scenario the correct answer would have been 10%  return on sales i.e $900-$700=$200/$2,000=10%

As the 10% option is missing in MCQ, therefore 45% is selected

4 0
4 years ago
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