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max2010maxim [7]
3 years ago
9

From Disposable Income, ____________ (the C in the expenditures model used to calculate GDP) is subtracted to arrive at Personal

Savings by all Households within our economy.
a. Consumption of Fixed Capital
b. Personal Consumption Expenditure
c. Capital Investment
d. None of the above
Social Studies
1 answer:
Ivenika [448]3 years ago
7 0

Answer:

b. Personal Consumption Expenditure

Explanation:

<u>The Personal Consumption Expenditure is a way to measure how much money an American person spends in goods and services at a national level.</u>

It divides in two categories, Goods and Services.

Goods: it divides in two sub-categories, these are durable goods which are long-lasting items, such as cars and washing machines and non-durable goods which are items that households use quickly, like groceries and clothing.

Services: These are the functions that businesses provide, so the households don't have to do it, for example, dry cleaners, yard maintenance, and financial services.

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Answer: monetary policies

Explanation:

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Open market operation : This is used when the central bank feels that the money in circulation is too little and wants to increase it, the bank will buy treasury bill from the commercial banks and give the commercial banks money. This will increase the money in circulation. But if the central bank feels that the money in circulation is too much and it wants to withdraw some, then the central bank sells treasury bill to the commercial banks and collect money from commercial banks this will decrease the money in circulation

Bank Rate : The bank rate determined the interest rate charged by banks on its loan. If the bank rate is high, the interest rate charged by commercial banks will be high.this will discourage the people from taken loan from the bank. But when the central bank reduces the bank rate, this will also make the interest rate to be low which will encourage the people to borrow from the commercial banks.

Cash Reserves : All commercial banks are expected to keep a certain percentage of their total deposit with the central bank. If the cash deposit ratio is increased the quantity of money left for commercial banks to lend out is reduced, but if the cash deposit ratio is reduced, then the quantity of money left for commercial banks to lend out is increased.

The Directives : The central bank may give central directives to commercial banks which they must follow, for example the central bank may ask the commercial banks to give credit for agricultural and industrial expansion. This will be the immediate channels to which credit may be directed.

Special Deposits : If the central bank is so pressed and decides to decrease credit facilities or the availability of loans it may ask the commercial banks to keep special deposits with it.This is done to contract credit only.when special deposit are kept with the central bank the amount of money left with the commercial banks is reduced and this reduces their ability to give loans.

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