If the reserve requirement is 10 percent and the central bank sells 10,000 in government bonds on the open market, the money supply will <u>decrease by a maximum of $100,000.</u>
<h3>
What is Reserve Requirement?</h3>
- The amount of money that a bank must have in reserve in order to pay its obligations in the event of unforeseen withdrawals is known as the reserve requirement.
- The central bank uses reserve requirements as a tool to alter the amount of money in the economy and affect interest rates.
- Based on a portion of the cash that customers have on hand, banks lend them money.
- In exchange for this power, the government imposes one obligation on them to maintain a minimum balance of deposits to cover potential withdrawals.
- The reserve requirement is the amount that banks must hold in reserve and are not permitted to lend above.
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Answer:
The correct answer is letter "B": towards the interest.
Explanation:
Mortgage payments are composed of the principal and the interest. <em>During the early life of the mortgage, most of the payments go towards the interest because it is calculated according to the outstanding balance of the mortgage</em>, which is higher at the beginning but as the loan approaches, the maturity date most of the payments will be directed to the principal and a minimum to interest.
Answer:
Phishing
Explanation:
Phishing can be regarded as a cybercrime, it is when someone is masquerading him/her self as someone you trust to get the target information such as bank credit card, personal data and others from you as their target.
It should be noted that Phishing uses email messages or IMs that appear to be from those you do business with, such as your bank, credit card company, or social network.
Your answer would be, Snack food vendors were for the measure while beer vendors were
against it. Marijuana; and beers are considered substitutes as they
both affect the central nervous system as depressants; similarly
affecting to the body; and therefore, be viewed as
competitors in the market space; and reducing beer sales; as
consumers pursue marijuana. However,
snack foods are
considered complementary as marijuana use has been shown to
enhance sensory inputs; and produce "the munchies" resulting in
the user purchasing snack foods thus; elevating snack food sales.
Hope that helps!!!! : )
Answer
a) Gordon's Constant Growth model : P0 = D1 / (r-g)
r = 3% =0.03
, g= -7% = -0.07
, D0 = $5.1
D1 = D0*(1+g)
D1 = 5.1*(1-0.07)
D1 = $4.743
P0 = 4.743/(0.03- (-0.07))
P0 = 4.743/0.10
P0 = $47.43
So, Stock M should sell at a price of $47.43 today
b) Price 8 years from now
==> P8 = D9/(r-g)
P8 = D0*(1+g)^9/(r-g)
P8 = 5.1* (1-0.07)^9 / (0.03- (-0.07))
P8 = 5.1*0.52041108298 / (0.03- (-0.07))
P8 = 2.65410
P8 = $26.54
c) Investor may want to buy the stock today for the Dividends. If the dividends paid are high enough, the present value of the dividends is also high and may more than compensate the fall in stock price. This type of stocks work and give cash flows like a project where the initial cashflows are higher and later cashflows are less because of market factors.