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vovangra [49]
3 years ago
9

What are the three basic tools used to implement U.S. monetary policy? Describe in detail how each tool can be used to both expa

nd and contract the economy.
Business
1 answer:
Luba_88 [7]3 years ago
4 0

Answer:

The three basic monetary policy tools used by the U.S are; The discount rate, open market operations and reserve requirement.

Explanation:

The discount rate – This is the rate charged by Reserve Banks when lending short term loans to Commercial Banks. If there is a wish to expand the economy, the discount rate is lowered. This, in a domino effect, causes other interest rates such as consumer lending by commercial banks to lower. This encourages lending and spending by consumers and businesses through an increase in the money supply. When there is a wish to implement a contractionary policy, the discount rate is lowered thus causing other lending and borrowing rates to increase. This discourages borrowing and lending, eventually reducing the money supply in the economy.

Open market operations – This policy is achieved through the buying and selling of U.S Government securities. To achieve expansionary effects on the economy, the Fed buys government securities from members of the public, increasing the economy’s money supply. If, on the other hand, contractionary effects are desired, the Fed sells government securities to members of the public, and thus reducing the money supply.

Reserve requirements – These are portions of deposits that banks must hold in cash, either with the Reserve Bank or in their vaults. When there is a desire to practice expansionary policies, the Reserve bank lowers the requirement level thus increasing the amount of money that is available for lending in the commercial banks. This increases the money supply. If the Fed wishes to contract the economy, then the reserve requirement level is decreased thus reducing the money available for lending and in a ripple effect, the general level of money supply reduces.

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racism

Explanation:

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Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 25 percent for the next three years, with the gro
mel-nik [20]

Answer:

The current share price is $82.85

Explanation:

D1 = (2.85*1.25)

    = 3.56

D2 = (3.56*1.25)

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D3 = (4.45*1.25)

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Value after year 3 = (D3*Growth rate)/(Required rate - Growth rate)

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I hope that helped
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3 years ago
Frederick Company has two service departments (Cafeteria Services & Maintenance). Frederick has two production departments (
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Answer:

Maintenance total cost: 325,000

Cost Allocated to Packagin from Maintenance 162,500

Explanation:

\left[\begin{array}{ccccc}&Maintenance&Cafeteria&Assembly&Packaging\\Employees&4&&8&8\\Direct \: Cost&270,000&275,000&&\\Allocate C&55,000&-275,000&&\\Subtotal&325,000&&110,000&110,000\\Allocate M&-325,0004&-15,760&-162,500&-162,500\\Total&&&272,500&272,500\\\end{array}\right]

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Then we multiply this by each department employees and add them to their cost.

Maintenance total cost after adding cafeteria is 325,000

Then we do the same, we divide this amount for the emplyees of the processsing department:

8 + 8 = 16

325,000/16 =20,325.5

Then we multiply by 8 employees: 162,500

Maintenance total cost: 325,000

Cost Allocated to Packagin from Maintenance: 162,500

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