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Kruka [31]
3 years ago
7

Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the required reserve/deposit ratio is 10

percent. If the Central Bank raises the required reserve/deposit ratio making the new desired ratio equal to 15 percent, then the money supply in Macroland will ________ to ________ econs, assuming that the public does not wish to change the amount of currency it holds.
A)20,000; 22,000
B)5,000; 2,000
C)3,000; 5,000
D)5,000; 7,000
Business
1 answer:
I am Lyosha [343]3 years ago
7 0

Answer:

D)5,000; 7,000

Explanation:

Public is holding 2000 econs and banks reserves are 300 econs. It is mentioned that reserve requirement is 10%.

So total bank deposits must be 3000. Money supply in the economy is (3000 + 2000 = 5000)

When the reserve ratio is 0.1, that means the money multiplier is 10.

If there is an additional inflow of currency because of printing 200 econs by central bank then because of multiplier effect it will be 2000 econs.

Money supply from earlier 5000 econs will become 7000 econs.

Option D is correct.

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They’re affordable and highly targeted.
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The starting point in calculating net operating income is the total annual income the property would produce assuming 100% occup
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B. potential Gross

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Potential gross income refers to the gross income at 100% occupancy. On the other hand, effective gross income takes into account vacancy as well as other variables like collection loss.

3 0
3 years ago
Beaver Construction purchases new equipment for $50,400 cash on April 1, 2015. At the time of purchase, the equipment is expecte
mariarad [96]

Answer:

Beaver Construction

1. Journal Entry:

April 1, 2015:

Debit Equipment $50,400

Credit Cash Account $50,400

To record the purchase of new equipment for cash.

2. December 31, 2015:

Debit Depreciation Expense-Equipment $5,400

Credit Accumulated Depreciation - Equipment $5,400

To record the depreciation expense for the period.

3. Adjusted balances of Accumulated Depreciation and Depreciation Expense at December 31, 2015:

a) Accumulated Depreciation - Equipment

Beginning balance       $0

Depreciation Expense $5,400

Ending balance            $5,400

b) Depreciation Expense-Equipment $5,400

Explanation:

The depreciation expense for equipment is $5,400 ($600 x 9) since the depreciation charge for each month is $600.  The equipment was used from 9 months from April 1 to December 31 in 2015.  This implies that only $5,400 will be charged to Income Statement for the period.

7 0
3 years ago
A foreign company (whose sales will not affect cornish's market) offers to buy 3,000 units at $17.00 per unit. in addition to va
Marianna [84]

Trescott company had the following results of operations for the past year:

Sales (20,000 units at $22) $440,000

Direct materials and direct labor $200,000

Overhead (40% variable) 100,000

Selling and Administrative expenses (all fixed) 92,000 (392,000)

Operating income $ 48,000

A foreign company (whose sales will not affect Trescott's market) offers to buy 3,000 units at $17.00 per unit. In addition to the variable manufacturing costs, selling these units would increase fixed overhead by $500 and selling and administrative costs by $1,000. If Trescott accepts the offer, its profits will increase (decrease) by:

Answer : If Cornish accepts this order, its profits will increase by $13,500.

<u>Calculation of Variable Costs per unit :</u>

Direct Material and labor per unit = Total Direct Material and labor / No. of units sold

Direct Material and labor per unit =200000/20000 = $10

Variable Overhead per unit = Total Variable Overhead / No. of units sold

Variable Overhead per unit = (100000*0.4)/20000 = $2

Variable Cost per unit = $12 (Direct Material and labor per unit + Variable Overhead per unit)

Selling price of new order = $17 per unit

No. of units = 3,000

Increase in Fixed Costs = Inc in fixed overhead + inc in S&A Expenses

Increase in Fixed Costs = $1500 (500 + 1000)

Total Cost of new order = (Variable Cost per unit * No. of units) + Increased Fixed Cost

Total Cost of new order = (12*3000) + 1500 = $37,500

Total Revenues from new order = Selling price per unit * No. of units sold

Total Revenues = $51,000 (17 *3,000)

Profit from new order = Total Revenues from new order - Total Cost of new order

Profit from new order = 51000 - 37500 = $13,500

6 0
3 years ago
Which of the following taxes are paid by the employee and the employer? a.FUTA b.Federal withholding taxes c.SUTA d.FICA
vlabodo [156]

Answer:

The correct answer is letter "D": FICA.

Explanation:

The FICA (<em>Federal Insurance Contributions Act</em>) is a U.S. law that requires a paycheck deduction to be paid to <em>Social Security</em> and <em>Medicare</em>. Employers and employees share half the payment unless an individual is self-employed meaning the full amount must be covered by that person.

8 0
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