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olga nikolaevna [1]
2 years ago
11

g Explain the traditional interest-rate channel for expansionary monetary policy. Explain how a tight monetary policy affects th

e economy through this channel. Consider the housing market bubbles in 2008, and explain the limitations for 2008 crisis if you apply the traditional view.
Business
1 answer:
Svetllana [295]2 years ago
8 0

Answer:

The financing cost channel of the expansionary fiscal strategy helps in decreasing the pace of premium when there is an increment in the cash supply. This occurs as banks are furnished with abundance holds at whatever point there is an expansion in the cash supply. This can occur through open market acquisition of government protections, decrease in the save prerequisite or the rebate rate, which discharges non obtained saves for business banks. Rivalry among these banks helps in decreasing the pace important to utilize these stores in producing credits and making liquidity.  

In the comparable design, tight money related strategy which builds save prerequisite and rebate rate, or that happens through offer of government protections in open market by the national bank, decreases the abundance saves with the financial framework. This powers business banks to raise the pace of premium and to decrease borrowings.  

Housing market in 2008 face crash because of which there was lost riches with buyers. downturn in the economy began with decrease in total interest. Around then what was required in the economy was a lift to speculation that could trigger financial action. The central bank reduced the pace of enthusiasm by injecting cash in the framework. In any case, loan fees were at that point low and couldn't be additionally diminished. Because of the zero lower bound coming to, the central bank began confronting issues with the conventional money related strategy loan fee channel and hence it utilized quantitative facilitating what's more.

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A company's net sales were $676,600, its cost of goods sold was $236,810 and its net income was $33,750. Its gross margin ratio
algol13

Answer:

13.01%

Explanation:

Gross Margin Ratio = \frac{Net Sales - Cost of Goods Sold}{Net Income}

Gross Margin Ratio = \frac{676,000 - 236,810}{33,750}

Gross Margin Ratio = \frac{439,190}{33,750}

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Gross Profit Margin is represented as (Percentage) %. Now, the Gross profit margin is really worth investigating. It not only helps when comparing Gross Profit Margin with competitors but is also helpful in investigating and comparing previous year's Gross Profit Margin. If the Gross Profit Margin fallen there could be number of reasons for this, one might be the cost of goods sold has gone up. On contrary, on the other hand the increase in Gross Profit Margin might be because of increase in selling prices.

7 0
3 years ago
2)Torres Inc. recently began production of a new product, the halogen light, which required the investment of $600,000 in assets
madreJ [45]

Answer:

The selling price is $99

Explanation:

The selling price of the product can be computed by adding required profit margin to the unit cost of the product.The required profit margin is the 10% return on invested assets.

Total variable cost           $59*10000                =$590,000

Fixed expenses ($180,000+$60,000)               =$240,000

desired profit margin(10%*$600,000)                =$60,000

Total sales revenue                                              =$990,0000

price per unit=$990,000/10000=$99

The cost-plus approach to product pricing gives $99

3 0
3 years ago
On October 1, 2018, Swifty Company places a new asset into service. The cost of the asset is $125000 with an estimated 5-year li
Novosadov [1.4K]

Answer:

The book value of the plant asset on the December 31, 2018 is $75,000.

Explanation:

<u>Determine the depreciable cost,</u>

The depreciable cost = Acquisition cost - Salvage value.

The depreciable cost = 125,000 - 30,500.

The depreciable cost = $94,500.

<u>Determine the annual depreciation expense,</u>

The annual depreciation expense = depreciable cost/useful life

The annual depreciation expense = 94,000/5

The annual depreciation expense = $18,900.

<u>Find the % rate of depreciation .</u>

The % rate of depreciation = (18,900/94,500) × 100.

% rate of depreciation = 20%

Since it is the double-declining-balance method of depreciation we multiply the % rate by 2 =  20% × 2 = 40%

<u>Applying the rate to the carrying value of  the asset to obtain current year's depreciation expense.</u>

Current year's depreciation expense = Carrying value of  the asset × the depreciation rate %.

Current year's depreciation expense = 125,000 × 40%.

Current year's depreciation expense = $75,000

<u />

4 0
3 years ago
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