1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alona [7]
3 years ago
11

When the economy is operating at point C, the Federal Reserve may decrease the discount rate to

Business
1 answer:
brilliants [131]3 years ago
7 0

Answer:

D ; increase growth

Explanation:

The discount rate is one of the tools that the Federal Reserve uses to direct monetary policy.  Banks are subject to minimum reserves requirements. If a bank falls below this minimum, it can borrow from the banks with a surplus,  or borrow from the federal reserve. If it borrows from the Fed, the interest rate that applies is the discount rate. The discount rate is always higher than the fed fund rate; hence, banks use it as a last resort.

The discount rate and the fed rate have similar effects on the economy.  The Fed uses the discount rate to regulate the money supply in the country. When the growth in slow, the fed will reduce the discount rate.  A low discount rate means the cost of borrowing money goes down. The impact is that individuals and businesses will afford to borrow money for consumption and investment.

Increased levels of investments and consumption will mean a higher GDP, which is growth.

You might be interested in
What are five foundations of economics? increasing trade between two countries makes everyone in those countries better off.
geniusboy [140]

The five foundations of trade are:

  • incentives
  • tradeoffs
  • opportunity cost
  • marginal thinking,
  • principle that trade creates value.

<h3>Why do we engage in trade?</h3>

There are five main foundations of trade that are the reason why people engage in trade. One of them is the profit incentive to make money from trade. Another is the tradeoffs that people are forced to make to survive.

Opportunity cost also leads to trade because people give up one thing for another and so may have to sell the thing they gave up to receive the thing they want. There is also the principle which posits that when we trade, value is created. Finally, there is marginal thinking which is thinking along the lines of the benefit of one additional unit.

Find out more on the foundations of trade at brainly.com/question/2710473

#SPJ1

5 0
2 years ago
True or false: When units produced are less than units sold, net income under absorption costing will be less than net income co
Oliga [24]

Answer:

True

Explanation:

Generally, net income will be the same under absorption costing and variable costing. However, producing fewer units than units sold will decrease the net income under absorption costing. As whatever the variable cost is under the absorption method, fixed manufacturing overhead remains the same that decreases the gross profit and net income. Under the variable costing, the fixed overhead will be calculated as per the units produced. Therefore, the net income will decrease proportionately.

6 0
3 years ago
Question 4 of 10
ExtremeBDS [4]
I think the answer is either a or c
7 0
1 year ago
David's marketing research returned the finding that customers were staying away from his bookstore because of a lack of service
snow_tiger [21]

Answer:

The knowledge gap can be filled with a knowledge management strategy. It involves identifying the knowledge gap and vulnerabilities and setting strategies for each of these gaps. There are three types of gaps in strategic management: Knowledge gap, strategic gap, Relations gap. The knowledge gap occurs when the company doesn't know what it needs to know. similarly, David lacks the knowledge that the customers were staying away from his shop because of the lack of services.

6 0
3 years ago
Caddie Manufacturing has a target debt-equity ratio of .95. Its cost of equity is 11 percent, and its pretax cost of debt is 7 p
Zigmanuir [339]

Answer:

8.20%

Explanation:

Debt equity ratio = 0.95

or

Debt = 0.95 × equity

Cost of equity, ke = 11% or 0.11

Pretax cost of debt, kd = 7% or 0.07

Tax rate = 24% or 0.24

Therefore;

WACC = {Weight of equity × ke } + {Weight of debt × kd × (1-Tax rate)}

It is to be noted that ;

Weight of equity = Equity ÷ (Debt + Equity)

= Equity ÷ ( 0.95×Equity + Equity)

=1 ÷ 1.95

=0.513

Also,

Weight of debt = Debt ÷ ( Debt + Equity)

=0.95 × Equity ÷ ( 0.95 × Equity + Equity)

= 0.95 ÷ 1.95

=0.487

Hence,

WACC = {0.513 × 0.11} + {0.487 × 0.07 × (1-0.24)}

= {0.05643} + {0.03409 × 0.76}

= 0.0823384

or

0.0823384 × 100%

=8.23384

=8.20%

6 0
3 years ago
Other questions:
  • A company has an investment project that would cost $10 million today and yield a payoff of $15 million in 4 years.
    12·1 answer
  • The biweekly taxable wages for the employees of rite shop follow. Compute the FICA taxes for each employee and the employers FIC
    10·1 answer
  • Roster co. adjusts its allowance for doubtful accounts at year end. the general ledger balances for the accounts receivable and
    13·1 answer
  • Bill heard, as part of the _____ curriculum in his school, that certain races were not as good as others, and that coolness was
    9·1 answer
  • Alexandra has determined that studying an hour for her economics quiz will improve her grade on the quiz from 75 to 100. She als
    13·1 answer
  • Your Aunt Elsa has $500,000 invested at 6.5%, and she plans to retire. She wants to withdraw $40,000 at the beginning of each ye
    6·1 answer
  • Assume you run the central bank of a large open economy with floating exchange rates. Output, unemployment and inflation are whe
    12·1 answer
  • A metal alloy bolt is initially at 100.0°C. It is dropped into a coffee cup calorimeter containing 50.0 g of water at a temperat
    12·1 answer
  • A few years ago, Michael Tucker purchased a home for $182,000. Today the home is worth $230,000. His remaining mortgage balance
    6·1 answer
  • The roles and responsibilities of human resource management have evolved primarily because of changes in the law that rewrote ma
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!