Answer the question on the assumption that the legal reserve ratio is 20 percent. Suppose that the Fed sells $500 of government
securities to commercial banks (paid for out of commercial bank reserves) and buys $500 of securities from individuals, who deposit the cash in checking accounts. As a result of the given transactions, the supply of money in the economy will:________ a) rise by $500. b) remain unchanged. c) fall by $500 d) fall by $100.
Option A is the correct answer, the supply of money in the economy will rise by $500
Explanation:
The fact that commercial banks paid for the government securities bought from Fed using their reserves,ultimately means that sale had no impact on the cash in circulation as reserves are the minimum cash to be held by commercial banks and not to be lent or paid to bank customers.
From the foregoing,the only transaction that would impact the amount of money in circulation is the purchase of government securities by Fed from individuals.By doing so,Fed releases additional $500 into circulation to pay for the securities bought,hence cash in circulation rises by $500
The transformational leaders are bureaucratic and charismatic are people oriented in nature.
Explanation:
The charismatic leaders are also called as the transformational leaders and shares various things.
Charismatic leaders make their status better and transformational leaders focus on the transformation of the organization's vision. The main difference is the focus and the audience.
The charismatic leaders are committed and have engaging personalities like martin Luther king as his speeches were often more tangible than other leaders and used to have a huge influence on the people he met.
The charismatic leaders are more emotionally attached to their audience. They work towards an emphasis on the greater good. More people-oriented.
Spending can be mandatory spending or discretionary spending. Mandatory spending means the spending on essentials goods such as food. Discretionary spending means the spending on recreation and entertainment where people have additional money in hand after meeting their necessary expenses.
In this speech Obama speaks about the non essential expenses when they are controlled more investments can be made. He says when all the departments cut down their discretionary expenses then can result in economic growth.
Teleology is a philosophical idea that things have goals or causes. It is the view that developments are due to the purpose or design which is served by them
