Answer:
$45 billion
Explanation:
As per the data given in the question,
Marginal propensity to consume(MPC) = 0.9
Multiplier = 1 ÷ (1-MPC)
= 1 ÷ (1-0.9)
= 1 ÷ 0.1
= 10
Required change in money supply = $450 billion
Investment needed = Expansion ÷ Multiplier
= $450 ÷ 10
= $45 billion
Therefore, Least amount which can be spent by government to overcome the $450 billion gap = $45 billion
Answer:
The answer is B. Limited
Explanation:
A market is liquid if market participants can either sell or buy securities (assets, bonds etc.) easily with low transaction costs or without significantly reducing its price.
A purely domestic capital market is not as liquid as the one that also involves foreigners because it is purely domestic and market participants wont be that much compared to if market participants also involve foreigners.
Number of market participants is a key to liquidity. The higher the number, the more liquid a market is.
Answer:
Detailed solution is given in the tabular form below:
Answer:
A. the risk of wind damage is potentially diversifiable, but the risk of flooding is not
Explanation:
Based on the scenario being described it can be said that the best explanation for these different approaches would be that the risk of wind damage is potentially diversifiable, but the risk of flooding is not. Meaning that most insurance companies cover wind damage because it is most likely during a hurricane but flooding may be a unique situation which is not always covered by most insurance companies/policies.