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
AnnZ [28]
4 years ago
6

If the reserve ratio is 15 percent, and banks do not hold excess reserves, and people hold only deposits and no currency, then w

hen the Fed sells $25.5 million worth of bonds to the public, bank reserves
A. increase by $25.5 million and the money supply eventually increases by $382.5 million.
B. decrease by $25.5 million and the money supply eventually decreases by $170 million.
C. increase by $25.5 million and the money supply eventually increases by $170 million.
D. decrease by $25.5 million and the money supply eventually decreases by $382.5 million.
Business
1 answer:
8090 [49]4 years ago
7 0

Answer:

Option (B) is correct.

Explanation:

Given that,

Required reserve ratio = 15 percent

Bonds sell to public = $25.5 million

Bank reserves decreases by $25.5 million because of the purchasing of bonds from the Fed.

Money multiplier:

= 1/Required reserve ratio

= 1/0.15

= 6.67

Therefore, the money supply decreases by:

= Money multiplier × $25.5 million

= 6.67 × $25.5 million

= $170 million

You might be interested in
At an auction sale, the buyer is the party making the offer, or bid. <br> a. True <br> b. False
lesantik [10]
A. true the buyer is the party making the offer
8 0
3 years ago
Read 2 more answers
in the absence of trade, the domestic price of soybeans is pn. if the world price of soybeans is pw, which of the following will
notka56 [123]

In the absence of trade, the domestic price of soybeans is pn. if the arena charge of soybeans is pw,b. the home charge of soybeans will rise, and home intake will fall.

The required details about domestic price is mentioned in below paragraph.

A domestic price degree represents the cutting-edge charge for a particular top or carrier in an economy. Government companies or country wide economists have a tendency to study diverse charge degrees for you to verify growing or falling prices, known as inflation and deflation in monetary terms, respectively.The term 'Domestic charge ' because it applies to the region of agriculture may be described as ' The charge at which a commodity trades inside a country, in assessment to the arena charge. For the ones commodities now no longer benefitting from a few shape of charge aid, the domestic price is decided with the aid of using deliver and demand. For commodities that acquire charge aid, the home charge is commonly set with the aid of using the mortgage price or a few similar aid degree that serves as a charge ground withinside the market running at the side of any import quota that can be in effect'.

To learn about domestic price visit here.

brainly.com/question/15584616

#SPJ4

6 0
1 year ago
Jennifer received news that she is getting a 5% raise. However, the Bureau of Labor Statistics just reported that prices are ris
Feliz [49]

Answer:

Jennifer is losing purchasing power by 2%.

Explanation:

An increase in prices indicates a decrease in the purchasing power of the consumers. An increase in income means an increase in the purchasing power of the consumers.  

A 5% raise means that Jennifer's income will increase by 5% and so will her purchasing power. But at the same time, a price rise by 7% means that her purchasing power will decrease by 7%.  

This means that overall her purchasing power will decrease by 2%.

4 0
4 years ago
Southern california publishing company is trying to decide whether or not to revise its popular textbook, financial psychoanalys
steposvetlana [31]

If the company requires a return of 10 percent for such an investment, calculate the present value of the project.

The present value of the project is $72349.51.

Since we consider only incremental cash flows for a project, we consider $21,600 for year one and calculate a 4% increase for each of the additional years.

We then calculate the Present Value Interest Factor (PVIF) at 10% for four years using the formula :

PVIF = 1 / [(1+r)^n]

Next, we find the product of the respective cash flows and PVIF for each year.

Finally, we find the total of the discounted cash flows for the four years to find the Present Value of the project.

8 0
3 years ago
XYZ Company produces a significant daily amount of electronic waste. The company disposes the waste into the ocean despite stric
natima [27]

Answer:

Legal responsibility

Explanation:

Since there have been regulations put in place by the government, it is thereforre a legally binding agreement between XYZ company and any other companies that does same as XYZ company.

The failure of XYZ company to honour the set regulations is a breach in its legal responsibilty alongside its corporate social responsibilty as well and it can be taken up by the government by either charging the XYZ company to court or revoking their operating license.

Cheers.

6 0
3 years ago
Other questions:
  • On December 31, 2020, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconve
    11·2 answers
  • Which of the following is false regarding the statute of frauds? a. It relates to fraudulent contracts. b. It does not address i
    14·1 answer
  • Large firms with significant slack resources (i.e., are able to launch a greater number of competitive actions) but that remain
    5·1 answer
  • Wildhorse Delight, Inc. charges an initial franchise fee of $74,700 for the right to operate as a franchisee of Wildhorse Deligh
    7·1 answer
  • Which economic procedure best encourages voluntary exchange?
    15·2 answers
  • Green Corporation reported pretax book income of $1,000,000. During the current year, the net reserve for warranties increased b
    11·1 answer
  • Crawl Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock out
    13·1 answer
  • Select the correct answer.
    8·1 answer
  • You are the manager of a monopoly, and your analysts have estimated your demand and cost functions as P = 200 − 2Q and C(Q) = 1,
    6·1 answer
  • a human resource professional comes up with a new way to recruit candidates for international positions that will result in more
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!