Answer: Sell government bonds and raise the discount rate
Explanation:
Fed uses open market operations for controlling the money supply in the economy. If fed wants to create a tight money market then it should sell the government securities to the public which will reduce the money supply in the economy. It is known as contractionary monetary policy.
Discount rate is defined as the interest rate on the discounted loan. If there is an increase in the discount rate then it will be more expensive for the banks to borrow from Fed and hence they borrow less. This will decrease the lending capacity of the banks which reduces the money supply in an economy.
Therefore, Sell government bonds and raise the discount rate are the best ways to contract the money supply.
Answer:
The answer is Fisher effect
Explanation:
The Fisher Effect is an economic theory depicts the relationship between inflation and interest rates. Real interest rates decreases as inflation increases
The Fisher Effect's formula is:
Real interest rate = the nominal interest rate - the expected inflation rate.
Therefore, Fisher effect occurs in countries here inflation is expected to be high, interest rates also will be high, because investors want compensation for the decline in the value of their money
Answer:
-0.5
Explanation:
Marginal rate of technical substitution (MRTS) refers to the rate at which the inputs are substituted for one another in a production of particular good.
Given that,
The marginal product of labor = 10
The marginal product of capital = 20
Hence,
= - 0.5
Therefore, the marginal rate of technical substitution is - 0.5.
The answer is productivity. The productivity is an financial measure of output per unit of input. Inputs comprise labor and capital even though output is classically measured in revenues and other gross domestic manufactured goods constituents such as business inventories. Productivity methods may be look at cooperatively cross-ways the whole economy or watched industry by industry to inspect tendencies in labor growth, wage levels and technological development.<span />
True. Zero-based budgeting assumes that all funding allocations must be justified from zero each year. The goal in a zero-based budget is to have the income minus the expenses of the business equal zero.
