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jek_recluse [69]
3 years ago
14

Suppose the reserve requirement is 20 percent and banks hold no excess reserves. A $1 billion purchase of government securities

by the Fed will:
Business
1 answer:
Alex777 [14]3 years ago
5 0

Answer:

increase the money supply by $5 billion

Explanation:

When the Fed carries on an expansionary monetary policy it lowers interest rates and purchases government securities in order to increase the money supply in an attempt to boost economic growth.

The increase in the money supply is determined by the total amount of the open market operations carried out by the Fed ($1 billion) and the money multiplier (= 1/reserve ratio = 1/20% = 5).

Total increase in money supply = $1 billion x 5 = $5 billion

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The top management of Myers Corp are planning a reorganization of their company to cut costs and increase efficiency. The differ
MrMuchimi

Answer:A. Charisma

Explanation:

Despite the fact that the managers will be on the receiving end of job cuts, they still support the management decision to reduce the work force, this show an extraordinary leadership support.

8 0
3 years ago
Explain the law of one price and the theory of purchasing power parity. Why doesn't purchasing power parity explain all exchange
Masteriza [31]

Answer:

The law of one price establishes that the product or service price will remain the same for all the entire world.

Explanation:

The law of one price establishes that the product or service price will remain the same for all the entire world. It is necessary to take into account for this law that the price of the currency  needs to be also the same and that the price of the product or service would not be affected by other factors such as additional buyers or sellers in the market.

On the other hand the purchasing power parity refers to the idea of an equilibrium of currencies in exchange rates, it means that the power for purchasing will be represented in the same way in the different countries, and it is important to mention that this theory is base in the law of one price.

The  the long run equilibrium is an idea that in theory represents all the equilibrium of prices, quantities, and markets in general; on the other hand, for the short run equilibrium there are some limitations in which the market cannot be explained as properly and fully balanced.

6 0
3 years ago
Kirsten, a friend of yours, plans to open a fashion boutique that will sell women’s clothing and accessories. She told you that
nataly862011 [7]

Generally, a small-business owner follows four steps to develop the pro forma income statement:

Establish a sales projection

Set up a production schedule

Calculate your other expenses

Determine your expected profit

After using your sales projection as a starting point, you calculate the cost of goods sold if you are selling a physical product.

I would also suggest looking at trade organizations and asking other small business owners to help forecast costs.

6 0
3 years ago
Read 2 more answers
Classical economist David Hume observed that as the money supply expanded after gold discoveries it took some time for prices to
Alchen [17]

Answer:

a. the prices should have risen, but production should not have changed.

Explanation:

In the case when the money supply is expanded after considering the discoveries of gold so here the prices are increased due to which the economy as the higher employment and the production level. But it is not consistent with the monetary neutrality as the prices are increased but the production level remain same or unchanged

5 0
3 years ago
Emmanuel would like to start a business with a popular fast food company. He agrees to pay a fee and royalties. This is an examp
adoni [48]
A franchise, option A.
4 0
3 years ago
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