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Anestetic [448]
3 years ago
15

Suppose the Fed conducts an open market sale of $50 million in government securities. If the required reserve ratio is 20%, what

is the maximum change in the money supply? Assume that banks try not to hold excess reserves and there is no currency withdrawal from the banking system.
Business
2 answers:
pogonyaev3 years ago
7 0

Answer:

The maximum change in the money supply is 250 million

Explanation:

In this question, we are asked to calculate the maximum change in money supply given that the required reserve ratio is 20%.

Firstly, we need to calculate the multiplier in this case.

The multiplier in this case can be calculated by dividing 1 by the required reserve ratio

Mathematically, multiplier = 1/required reserve ratio = 1/0.2 = 5(kindly note that 20/100 = 0.2)

Now, we move on to calculate the maximum change in the money supply.

This would be equal to multiplier * value of open market sale = 5 * 50 million = 250 million

Therefore, the maximum change in the money supply is 250 million

KATRIN_1 [288]3 years ago
3 0

Answer:

$250 million

Explanation:

we first get the money multiplier  which is

= 1/ reserve ratio

= 1 / 20% = 1 / 0.2 = 5

therefore the money multiplier  = 5

Assume the banks try not to hold excess reserves and also no currency withdrawals form the banking system the Multiplier will be valid to find the maximum change in the money supply

which is calculated as

= money multiplier * value of government security

= 5 * $50 million

= $250 million

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Answer:

$7,167

Explanation:

Assets are resources held by an entity as a result of a past event, for which future economic benefits will flow to the entity. it is further classified as current and non-current.

Examples include inventory, cash, accounts receivable, Fixed assets or Property plant and Equipment.

Given

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Net fixed asset = $4,827

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4 0
3 years ago
Sussman Co. prepared cash-basis financial statements for the month ended January 31. A summary of Sussman's January activities f
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Answer:

An increase of $2,500

Explanation:

During cash-basis accounting method, all income and expenses that results to ACTUAL CASH INFLOW and OUTFLOW will be recorded. Thus, those income and expenses that applies for the period will not be recorded yet as long as there is no actual cash outflow. And all income made on account for the period will not be recognized unless there is an actual collection. Based on the stated facts, Sussman Co.,recorded $1,900 sales instead of the actual sales of $5,600 using accrual basis and has never been recorded the expenses incurred in the accrued salaries.

So, $5,600 less $1,900 cash collection which already have recorded on cash basis method, there will be an additional sales to be recorded at $3,700 less the salaries expense already incurred but not yet paid of $1,200. There will be an additional income of $2,500 after restatement.

5 0
3 years ago
Georgia Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative
Lelu [443]

The change in Accounts Receivable will be shown on the statement of cash​ flows as:

C. Subtraction from net income under the operating activities section.

Net income is calculated by deducting from total revenue the cost of sales, operational expenses, depreciation, interest, amortization, and taxes.

Change in Accounts Receivable:-  

Accounts Receivable  

           In 2019                                 $ 48,000  

           In 2018                                 $ 45,000  

Increase in Current Assets              $ 3,000  

This implies Cash outflow from Operating Activities.

Thus it should be subtracted from Net Income under the Operating Activities section.

Net income is a company's profit for a given period, whereas cash flow from operating activities measures the cash that comes in and goes out during a company's day-to-day operations. Net income is used to calculate cash flow from operating activities. However, both are important in determining a company's financial health.

For more information on Net income, visit :

brainly.com/question/14213197

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