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agasfer [191]
3 years ago
15

Suppose that the US Federal Reserve Board was able to confirm that the US economy is in the brink of a recession, operating at a

GDP level (Y1) that is well below its full-employment capacity (YF). Your tasks are: a. Name one monetary policy, and specify the policy tool to use, that the Fed could make to help boost the economy. b. Using the AD-AS theory, show and EXPLAIN the expected short run and long run effect of this policy on the US economy.
Business
1 answer:
neonofarm [45]3 years ago
3 0

Answer:

a.) To combat recession the federal reserve board can adopt <u>expansionary monetary policy.</u> The fed can<u> reduce the cash reserve ratio</u>.

b.) The aggregate output and price is going to increase in short run. In the long run though economy will be operating at equilibrium level.

Explanation:

With the decline in the cash reserve ratio the total reserves with the banks will increase. This will boost credit credit creation. As the money supply in the economy increases the aggregate demand will increase. This will further lead to increase in price and output level.

In the medium term, the aggregate supply will also increase though not as much as demand, so there will be excess of demand. The price level will rise further.

In the long run though output will always be at the equilibrium level.

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Hi Mattotto5458,

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7 0
3 years ago
The more​ ________ used, the greater the leverage a company employs on behalf of its owners.
son4ous [18]

The more​ debt used, the greater the leverage a company employs on behalf of its owners.

<h3>What is financial leverage?</h3>

Financial leverage exists as the usage of borrowed money (debt) to finance the purchase of assets with the anticipation that the income or capital gain from the new asset will surpass the cost of borrowing.

<h3>What is financial leverage example?</h3>

An example of financial leverage use contains utilizing debt to buy a house, borrowing money from the bank to begin a store, and bonds issued by companies.

Debt exists as an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another group, the creditor. Debt stands for deferred payment, or sequence of payments, which distinguishes it from an immediate purchase.

To learn more about financial leverage refer to:

brainly.com/question/17099821

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8 0
2 years ago
Storico Co. just paid a dividend of $3.15 per share. The company will increase its dividend by 20 percent next year and then red
Elanso [62]

Answer:

$61.29

Explanation:

Calculation for what Storico Co. Share of stock will sell today.

Since we have a stock that has a normal growth in which the dividend growth changes every year for the first four years. We can therefore find the price of the stock in Year 3 because the dividend growth rate is constant after the third dividend, which means the price of the stock in Year 3 will be the dividend we are going to use in Year 4, we shall then divide it by the required return less the constant dividend growth rate.

Therefore the price in Year 3 will be calculated as :

P3= $3.15(1.20)(1.15)(1.10)(1.05) / (.12 – .05)

P3= $5.020785/0.07

P3=$71.72

Let find the price of stock today using the PV of the first three dividends in addition with the PV of the stock price in Year 3:

Hence,

P0= $3.15(1.20)/(1.12) + $3.15(1.20)(1.15)/1.12^²+ $3.15(1.20)(1.15)(1.10)/1.12^³+ $71.72/1.12^³

P0=$3.78/1.12+$4.347/1.2544+$4.7817/1.404928+$71.72/1.404928

P0=$3.375+3.465+3.4035+$51.048

P0= $61.29

Therefore if the required return on the company’s stock is 12% what the share of stock will sell for today will be $61.29

8 0
3 years ago
Hey can everyone subscribe to kill_good27 it well be helpful
zubka84 [21]

Answer:

yes.i can subscribe to kill_good27.

7 0
3 years ago
When faced with an employee performance problem, managers tend to experience two primary emotions: anxiety and anger; anxiety, b
VikaD [51]

Answer:

<u>Behavioral</u> theory can be used to acknowledge positive behavior with rewards and encourage others to improve their sub-par performance.

Explanation:

In employee management, a lot of theories can be used to strategically control human resources towards the fulfillment of the company's objectives.

To address an employees performance problem, managers are faced either with an option to sanction or deal ruthlessly as well as an option to stimulate excellence without necessarily applying strict measures.

To influence positive behavior organically in an organization, Behavioral theory can be applied.

Behavioral theory is a management theory that acknowledge positive behavior with rewards and encourage others to improve their sub-par performance.

5 0
3 years ago
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