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sergeinik [125]
3 years ago
7

In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the desired reserve/deposit ratio is

10 percent. If the Central Bank prints an additional 200 econs and uses this new currency to buy government bonds from the public, the money supply in Macroland will increase from ______ econs to ______ econs, assuming that the public does not wish to change the amount of currency it holds.
Business
1 answer:
kotegsom [21]3 years ago
7 0

Answer:

the money supply in Macroland will increase from <u>5,000</u> econs to <u>7,000</u> econs

Explanation:

Currently, Macroland's money supply = 2,000 econs held by the public and 3,000 econs held by the banks (= 300 econs x 1/0.1).

In order to determine the increase in the money supply we must multiply the inflow of econs by the money multiplier. The money multiplier = 1 / reserve ratio = 1/0.1 = 10.

Since the government is injecting 200 econs to the economy, the increase in the money supply = 200 econs x 10 = 2,000 econs.

So now, Macroland's money supply will increase from 5,000 to 7,000 econs.

The money multiplier measures the banking system's ability to "create" money. The banking system creates money by first receiving deposits, e.g. you deposit 10 econs in your savings account, and then lending money to another client. The bank will lend 9 econs (-10% required reserve) to John that will purchase a bike. The seller of the bike receives the money form John and deposits the 9 econs in his own bank. Then this second bank will lend 8.10 econs to Sarah. Sarah will use the money to purchase a new computer and a printer from Tom. Tom then deposits the money in his bank, and then his bank lends 7.29 econs to Sally, and the wheel goes on and on.

This money creating process is possible because Macroland uses a fractional banking system, which means that the banks are only required to keep a fraction of total deposits as reserves.

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Answer:

Dr Cash 800,100

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Preferred stocks and common stocks are part of stockholders' equity. Whenever they are sold above par value, the difference must be recorded as additional paid in capital. You must also specify which stocks were sold at a higher value.

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Which type of organization expects important decisions to be made by top-level managers?
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Answer:

In the centralized organizations which mostly includes banks, army corporations, etc because in these organisation the policies are set by the top management and the lower level management have to follow their instructions. I remember when the japanese Cheif Executive was appointed as the CEO of Sony America the whole of the workers went to strike against him because his attitude was centralised oriented organization which he was used to in Japan and in America people love to work in decentralized organisation. So basically in centralised organisation, lower management are delivered less responsibilities regarding making decisions. They are only accountable for doing the job according to the top management.

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3 years ago
Champagne of the​ South, Inc., a manufacturer of bottled sweet​ tea, had the following beginning and ending inventories for the
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Answer:

total manufacturing cost added for the period 105,169

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Cost of goods sold 110,564

Explanation:

First, we need to know the amount of direct materials used in production.

beginning raw materials 10,000

purchase                         27,000

ending                               (1,702)

indirect materials          <u>    (2,129)  </u>

direct materials                33,169

now, we calculate the cost added during the period

direct materials    33,169

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WIP                     17,895

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COGM             106,064

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beginning finished goods  21,000

COGM                                106,064

ending finished goods    <u>  (16,500)  </u>

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