Solution:
The reserve ratio is 10%.
Money multiplier = 
= 
= 10.
So, the money multiplier increases by 10.
Money supply = amount x money multiplier = 1,000 x 10 = 10000
Therefore, because any certain items are equivalent, the rise in the currency supply is 10000 dollars.
When the FED sells 1,000 million worth of debt, this would further increase the monetary market, as the investments are fresh funds and the income from the bank is now used in the money supply.
Answer:
The answer is option A). $6,710.60
Explanation:
The total amount Al miler will need to invest at the beginning to have the money in 15 years is known as the principal amount.
The formula for calculating the total amount after 15 years with interest compounded semiannually is as follows;
A = P (1 + r/n) (nt)
where;
A = the future value of the initial investment
P = initial investment amount/principal amount
r = the annual interest rate
n = the number of times that interest is compounded per unit t
t = the time the money is invested for
In our case;
A=$29,000
P=p
r=10/100=0.1
n=interest is compounded semiannually which is twice a year=2
t=15 years
Replacing values in the formula;
29,000=p(1+0.1/2)^(2×15)
29,000=p(1+0.05)^30
29,000=4.322 p
p=29,000/4.322
p=$6,710
Al must invest $6,710 for him to have enough money for the new equipment in 15 years
Answer:
D) Dividend payout ratio
Explanation:
Internal Growth Rate of a firm is the maximum growth rate at which the firm can grow without involving external financing i.e. without assuming additional debt or equity infusion in the firm. At this level of growth the cash available from the operations can be used to fund the company.
It is calculated using the formula
IGR= ROA* b / (1-ROA * b)
where
IGR is the Internal Growth Rate
ROA is return on assets
b is the retention ratio or (1-dividend payout ratio)
To answer the question we look at each option
If ROA (Return on Asset) is decreased the numerator decreases and denominator increases in equation (1) and thus the Internal growth rate decreases, so ROA is not the answer
If Net Income is reduced the Return on Assets also falls thus as in the above case Internal growth Rate decreases
If retention ratio is reduced the numerator decreases and denominator increase leading to a fall in IGR
If dividend payout ratio is decreased the retention ratio increases leading to the increase in numerator and decrease in denomonator leading to an increase in the IGR. Thus Decreasing the dividend payout ratio will increase the IGR.
If Return on Equity is reduced i.e. indirectly Net Income is reduced for the same equity the similar effect as in part for Net Income and thus reduces the IGR.
So decreasing dividend payout ratio increases the interna growth rate of a firm
monopolistic competition, if you are asking a question from plato
Answer:
entry shock
Explanation:
In simple words, entry shock refers to the stage in an individuals professional career where he or she might feel confused about his or her work and get concerned with their future. There could be many reasons behind such a scenario.
Some of which is lack of understanding of the practical aspects of the knowledge to be performed, lacking adjustment in the work environment etc. Thus, from the above we can conclude that the given case illustrates entry shock.
