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4 years ago

How will a decrease in the federal government's budget deficit affect the equilibrium interest rate in the bond market?

Business

1 answer:

sasho [114]4 years ago

6 0

Answer:

Interest rate decrease

Explanation:

When the federal budget deficit increases, the Government Issue more treasury bonds to raise funds which increase the equilibrium interest rate in the bond market. Similarly, if the budget deficit decreases, the government stops issuing more bonds which decrease the equilibrium interest rate. It’s a simple concept of demand and supply which determines the interest rate.

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The currency drain ratio is 0.5 of deposits and the banks' reserve ratio is 0.4. What is the money multiplier?

dimaraw [331]

Answer: 1.67

Explanation:

From the question, we are informed that the currency drain ratio is 0.5 of deposits and the banks' reserve ratio is 0.4.

The money multiplier is calculated as:

(1 + the currency drain ratio)/( the reserve ratio + the currency drain ratio)

= (1 + 0.5)/(0.5 + 0.4)

= 1.5/0.9

= 1.67

Therefore, the money multiplier will be 1.67.

3 0

3 years ago

Assume that consumers in a nation reduce their marginal propensity to save from 0.25 to 0.2 though their personal incomes initia

umka21 [38]

Answer:

Since the multiplier is now higher than before, this change in MPS will therefore make the real gross domestic product (GDP) to increase.

Explanation:

Old marginal propensity to save = 0.25

Old marginal propensity to consume = 1 - 0.25 = 0.75

Old multiplier = 1 / Old marginal propensity to save = 1 / 0.25 = 4

New marginal propensity to save = 0.20

New marginal propensity to consume = 1 - 0.20 = 0.80

New multiplier = 1 / New marginal propensity to save = 1 / 0.20 = 5

Change in multiplier = New multiplier - Old multiplier = 5 - 4 = 1

Therefore, the decrease in marginal propensity to save (MPS) will increase marginal propensity to consume (MPC) form 0.75 to 0.80 and the multiplier from 4 to 5.

Since the multiplier is now higher than before, this change in MPS will therefore make the real gross domestic product (GDP) to increase.

7 0

3 years ago

When thinking about a washing machine as a system, which of the following represents the inputs? Multiple Choice the dirty cloth

Over [174]

Answer: The dirty clothes, water and detergent

Explanation: Inputs are the resources that are put into the system to attain a desired output, that may have a value to someone. The output is the final commodity that one get at the end of the system.

If we see washing machine as a system then the cleaned clothes are the output from that system. The resources that are used to get the clothes cleaned such as dirty clothes, water and detergent are the inputs.

Hence from the above we can conclude that the correct option is A.

5 0

3 years ago

Select the TWO True statements about the Selection of Distribution Channels:

sladkih [1.3K]

There are different kinds of distribution channels. The True statements about the Selection of Distribution Channels are:

Product price has no effect on the length of a distribution channel.

The geographic location of customers does not require different distribution channels

The channel of distribution are classified based on:

The Nature of the Product
The Nature of the market
The Nature of Middlemen
The nature and size of the manufacturing etc.

The channel of distribution is also known as marketing channel. They are simply known as different types of interdependent organizations that are engaged in the process of making a product or service available for use or consumption.

Learn more about Distribution channels from

brainly.com/question/25736500

7 0

3 years ago

Computing Cost of Sales and Ending Inventory Stocken Company has the following financial records for the current period. Units U

HACTEHA [7]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Computing Cost of Sales and Ending Inventory Stocken Company has the following financial records for the current period.

Units= 100

Unitary Cost Beginning Inventory $ 46

Purchases:

#1= 650units at $42

#2= 550units at $38

#3= 200units at $36

The ending inventory is 350 units.

A) First in, first out

First, we need to calculate the number of units sold:

Units sold= beginning inventory + purchases - ending inventory

Units sold= 100 + 1400 - 350= 1150

Ending inventory= 200 units at 36 + 150 at 38= 200*36+150*38=$12900

Cost of goods sold= 100*46 + 650* 42 + 400* 38=$47100

B) Average cost= total cost of units available for sale/ number of unit

Average cost= (100*46+650*42+550*38+200*36)/1500

Average cost= $40 unit

Ending inventory= 350*40= $14,000

COGS= 1150*40= $46,000

C) Last in, first out

Ending inventory= 100 units* 46 + 250 units*42= $15,100

COGS= 200* 36 + 550*38+ 400*42= $44,900

8 0

4 years ago