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Sever21 [200]
3 years ago
7

After a sluggish quarter, the Federal Reserve Bank decides to increase the money supply in the economy. When the money-creation

process is complete, the Fed wants there to be $20 billion worth of new funds in the money supply. If the required reserve ratio is 5%, what is the simple money multiplier, and by how much should the Fed initially increase the money supply? Assume that all currency is deposited in banks and that banks hold no excess reserves.
Business
1 answer:
Maslowich3 years ago
5 0

Answer:

20; $1 billion

Explanation:

Given that,

New funds = $20 billion

Required reserve ratio = 5%

Money multiplier:

= 1/Required reserve ratio

= 1/0.05

= 20

Initial money increase by:

= Funds wants to be in the money supply × Required reserve ratio

= $20 billion × 5%

= $1 billion

Therefore, the Fed should initially increase $1 billion in the money supply.

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Brainstorming helps coworkers
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Answer:

free to share their voice

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3 years ago
Michael (single) purchased his home on July 1, 2009. He lived in the home as his principal residence until July 1, 2017 when he
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Answer:

correct option is C. $250,000

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solution

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5 0
3 years ago
Compare and contrast the product vs. process layouts. What are the advantages &amp; disadvantages? List examples of products tha
Contact [7]

Answer:

Explained below.

Explanation:

With a product layout, equipment breakdown has serious implications because the separate pieces of equipment are closely tied together. If one piece of equipment fails, the line will quickly come to a halt. Consequently, preventive maintenance to reduce the failure rate is advisable. In contrast, a process layout often contains duplicative equipment so that if one particular piece of equipment fails, the work can usually be shifted to another piece of equipment. Consequently, there is less need for preventive maintenance and less need for repair of equipment when it does break down. Moreover, process layouts utilize more skilled workers who tend to take better care of the equipment than the lower-skilled workers do in a product layout system.

* The main advantages regarding the product layouts include:

a. A potentially huge rate of output.

b. Lowering unit costs.

c. Low training costs and a broad span of supervision due to specialization.

d. The low unit price concerning material administration.

e. High utilization of labor and tools.

f. Routing as well scheduling are being built into the design.

g. Accounting, purchasing, including inventory control are routine.

* The main disadvantages regarding the product layouts include:

a. Specialization can lead to dull, repetitive jobs with little opportunity for personal satisfaction or creativity.

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d. Specific stimulation systems are possible.

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c. Equipment utilization valuations are habitually low.

d. Material handling is slower, less efficient, and more costly per unit than is the case in a product layout.

* Example of product layout includes self-service cafes, car assembly as well as car valeting.

* Example of process layout are milling, drilling, grinding, hydraulic presses, as well as lathes)

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