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3 years ago

In a small open economy with a floating exchange rate, an effective policy to increase equilibrium output is to________

Business

1 answer:

Dmitriy789 [7]3 years ago

4 0

Answer:

The correct answer is increase the money supply.

Explanation:

The increase in the money supply (print more banknotes and coin coins) has a direct effect on inflation that usually leads to it rising.

When the money supply is increased, the nominal value of the money remains unchanged but not the real value of the money, since in the face of the increase in prices, less goods and services are acquired with the same money. It is what is known as loss of the purchasing power of money.

Under this assumption, so that the increase in the money supply has no effect on inflation, that increase must correspond to the increase in the supply of goods and services, or what is the same, the printing of money must obey a specific need originated in the increase of production and economic dynamism, and not as a decision without real bases that leads to increase the amount of money circulating artificially with the aim of increasing consumption via indebtedness, since the final destination of that additional money and "imaginary" is to place it on the market by granting credits, since there is no new offer of goods and services, it cannot be exchanged for them.

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Suppose you deposit $1 comma 2001,200 cash into your checking account. By how much will the total money supply increase as a re

Dafna11 [192]

Answer:

The change in money supply amounts to $7,084,248

Explanation:

Computing the change in money supply as:

Using the multiplier as:

Multiplier = 1 / Required reserve ratio

where

Required reserve ratio is 0.220

So,

Multiplier = 1 / 0.220

Multiplier = 4.54

So, the new money supply would be:

= Multiplier × Old money supply

where

old money supply is $2,001,200

Multiplier is 4.54

So,

= 4.54 × $2,001,200

= $9,085,448

Therefore, change in money supply is:

Change in money supply = $ 9,085,4448 - $2,001,200

Change in money supply = $7,084,248

7 0

4 years ago

To raise wealth and stimulate private spending, suppose the central bank lowers interest rates, making stock market investment r

Nat2105 [25]

<span>The effectiveness of the policy might be best monitored using the S&P 500, because it draws from a broader set of companies. The Dow Jones Industrial Average is an index of 30 leading companies. While it reflects the overall health of the stock market, it does not provide enough information about small companies.</span>

6 0

4 years ago

g The Morrit Corporation has $960,000 of debt outstanding, and it pays an interest rate of 8% annually. Morrit's annual sales ar

harina [27]

Answer:

6.21%

Explanation:

The computation of the times interest earned ratio is given below:

As we know that

Times interest earned ratio = EBIT ÷ Interest

Now for determining this, following calculations must be done:

The interest is

= $960,000 × 8%

= $76,800

Net profit

= Annual sales × net profit margin

= $6,000,000 × 0.05

= $300,000

Now the pre tax income is

= net income ÷ ( 1 - tax rate)

= $300,000 ÷ (1 - 0.25)

= $400,000

Now the EBIT is

= Pre tax income + interest expense

= $400,000 + $76,800

= $476,800

So, the TIE ratio is

= $476,800 ÷ $76,800

= 6.21%

3 0

3 years ago

Paolucci Corporation's relevant range of activity is 8,400 units to 17,000 units. When it produces and sells 12,700 units, its a

kati45 [8]

Answer:

The variable cost per unit sold is closest to $14.85

Explanation:

In order to calculate the variable cost per unit sold we would have to use the following formula:

Total variable cost per unit=(Direct materials+Direct labor+Variable manufacturing overheads+Sales commissions+Variable adminsitrative expenses)

Therefore,Total variable cost per unit=$7.10+$4.00+$2.00+$1.25+$0.50

Total variable cost per unit=$14.85

The variable cost per unit sold is closest to $14.85

6 0

3 years ago

All of the fixed manufacturing overhead costs would continue whether Part B89 is made internally or purchased from an outside su

saul85 [17]

Answer:

Outsource the production of B89, manufacture the new product and buy the part from a vendor to earn an extra $5.10 per unit.

Explanation:

Lasso Corporation manufactures a variety of appliances which all use Part B89. Currently, Lasso manufactures Part B89 itself. It has been producing 10,000 units of Part B89 annually. The annual costs of producing Part B89 at the level of 10,000 units include the following:

Direct materials $3.00

Direct labor $8.10

Variable manufacturing overhead $4.20

Fixed manufacturing overhead $3.20

Total cost $18.50

If Lasso decides to purchase Part B89 form a vendor, it will be able to save = direct material, direct labor and variable overhead = $3 + $8.10 + $4.20 = $15.30, and it will free the facility in order to produce another product that generates a $10 per unit contribution margin.

The decision to outsource production saves or generates = $15.30 + $10 = $25.30

The cost of outsourcing the production = $20.20

net impact = $25.30 - $20.20 = $5.10

Since the impact is positive, Lasso will earn a higher profit by outsourcing, so they should do it.

Make the new product and buy the part to earn an extra $5.10 per unit contribution to profit.

5 0

4 years ago