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Mrrafil [7]
3 years ago
5

During the last half of 2008, the Fed seemed to take "baby steps" in reducing the federal-funds rate target, before finally lowe

ring it to zero. Why can't the Fed push the rate any lower than zero? Why do you think that the Fed was so seemingly reluctant to push the rate all the way to the floor?
Business
1 answer:
emmasim [6.3K]3 years ago
4 0

Answer:

Why can't the Fed push the rate any lower than zero?

Real interest rates can be lower than zero, or negative (because inflation rate is higher than interest rate), but nominal interest rates are generally only limited to zero. But during this same time, the European Central Bank actually started paying negative interest rates on money deposits and many European private banks followed. That means that they charged people for having their money on the bank.

Why do you think that the Fed was so seemingly reluctant to push the rate all the way to the floor?

The reason why the Fed was not willing to push the interest rates to zero or even below zero was that by doing so, the US dollar would have depreciated or lost value. In Europe this was done to encourage people to spend their money and not save as much, but in the US that is not really a problem. Generally in the US the problem is that people spend too much and save too little, but on some European countries and Japan, people tend to save too much. For example in Japan the national savings rate fluctuates between 22-40%, while the maximum savings rate in the US has been 10.4% in 1960, it currently is around 7.6%.

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Compared to the United States, unemployment rates in Western Europe tend to be: higher because of fewer labor regulations. lower
Snezhnost [94]

Answer:

higher because of fewer labor regulations

Explanation:

  • As compared to the labor wages the employment rates in the western Europe are much higher as to the U.S as they lack incentives and have more labor regulations and thus western European nations have about 4.7 % of the 8.1% of the rates n the U.S as of 2017. May be attributed to the shortage of job market.
7 0
3 years ago
Irish Corporation issued (sold) 15,000 shares of common stock for $65 per share. The bylaws established a stated value of $5 per
Orlov [11]

Answer:

the amount of increase in the common stock is $75,000

Explanation:

The computation of the amount of increase in the common stock is shown below;

= Number of shares of common stock sold × stated value per share

= 15,000 shares × $5 per share

= $75,000

Hence, the amount of increase in the common stock is $75,000

3 0
3 years ago
Determine the amount of money that must be invested now​ (time 0) at 10​% nominal​ interest, compounded​ monthly, to provide an
Veseljchak [2.6K]

Answer:

the amount of money that must be invested now is $21068.87

Explanation:

Given that:

Nominal interest = 10%

Annuity = 7000

n = 8 years

The Effective interest rate is calculated by using the formula:

Effective interest rate = ( 1 + \dfrac{r}{100 \times n})^n-1

Effective interest rate = ( 1 + \dfrac{10}{100 \times 8})^8-1

Effective interest rate = 0.1045

Effective interest rate = 10.45 %

Thus ; the the amount of money that must be invested now​  is the present value with the annuity of ​$7, 000 per year for 12 ​years, starting eight years from now.

PV = 7000(\dfrac{(1+ 0.1045)^{12}-1}{0.1045(1 + 0.1045)^{12}})( \dfrac{1}{(1+ 0.1045)^8})

PV = 7000 × 6.666056912 × 0.4515171371

PV = $21068.87

Thus; the amount of money that must be invested now is $21068.87

4 0
3 years ago
PEZ Candy Inc. produces the popular small candy that is dispensed in collectible flip-top dispensers. In the United States, PEZ
aleksandrvk [35]

Answer:

PEZ Candy Inc.

1. PEZ Candy Inc. would be more likely to use process costing for the manufacture of its PEZ candies.

The reason is that the manufacturing of candies involves continuous processing of materials that results into candies.  The processes are not customizable for separate orders.

2. PEZ Candy Inc. would incur these types of costs in the manufacture of its PEZ candies:

a. Direct material = sugar

b. Direct labor = wages of factory workers

c. Manufacturing overhead = utilities expenses

i. indirect materials = cleaning supplies

ii. indirect labor = factory supervisor's salary

iii. other manufacturing overhead = depreciation expense of factory equipment

3. PEZ Candy Inc. would be more likely to use job costing to calculate the cost of one particular birthday party hosted at the PEZ Visitor Center.  The reason is that it is a specific event.  It does not involve a continuous process.

Explanation:

a) Data and Calculations:

Materials for PEZ candy include:

Direct materials:

Sugar (95%)

Fruit flavoring

Coloring

Corn syrup

Product = PEZ candies

Services: customized birthday parties

6 0
3 years ago
Which of the following is an adjustment to a pay rate to reflect differences in working conditions or labor markets?A. bonusB. p
Ksju [112]

Answer:

The correct answer is letter "B": pay differential.

Explanation:

Pay differential refers to the extra income received by an employee as a result of working out of the established working hours agreed in his or her contract. Pay differential is usually the monetary benefit a worker receives after working overtime or during a graveyard shift.

6 0
3 years ago
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