In an open-market operation, the Fed buys $10 million of government bonds from individual investors. If the required reserve rat
io is 10 percent, the largest possible increase in the money supply that could result is $________ million, and the smallest possible increase is $_________ million.
To solve for the semimonthly payments on Max's insurance cost:
Annual insurance rate: $11,700
Employer pays 60%
What is Max's amount to pay?
(11,700)(.60) = $7,020
Max's employer pays $7,020
Max pays $4,680 (11,700-7,020)
If Max pay's $4,680 a year and we want to know but he pays semimonthly, or twice a month then we need to divide his annual payment by 24 since there are 12 months and he pays twice a month.
A budget is a plan you make to decide how you spend your money.
To make a budget you must decide how much of your money you want to spend and how much of it you want to set aside. To balance a budget, keep track of all your expenses, payments, and income.
When the Fed reduces money supply, it will remove the amount of excess money that people have to spend in the economy. This will lead to prices reducing because people no longer have a lot of money to spend on products therefore they will demand less goods. This will lead to the Aggregate demand curve shifting to the left. The new intersection with the Aggregate Supply curve will be at a point where prices will be lower and less quantity will be demanded which will signify a drop in the short-run output of the economy.
