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3 years ago

Which of the following statements is true?

Business

1 answer:

OlgaM077 [116]3 years ago

3 0

Answer:

These statements are true:

A) The Federal Reserve does not set the Federal funds rate, but it influences it through the use of open market operations:

For example, at the very moment the Fed funds rate is 1.75%. If the Fed wanted to raise it to 2%, it would have to do so through the use of open market operations (in this case, because it wants to raise the rate, it would have to sell securities in order to reduce the money supply).

C) The Federal Reserve sets the target for the Federal funds rate, and then uses the reserve ratio to push banks toward that target.

Reserve requirements are perhaps the most powerful, and least often used, monetary policy tool that the Fed has at its disposal. It is very powerful because it directly increases or decreases the money supply.

For example, if the Fed wants to increase the fed funds rate, it can raise the reserve ratio so that banks keep more money in reserves, have less money to loan, and in consequence, create less money, causing the money supply to shrink and the fed funds rate to rise accordingly.

D) The Federal Reserve sets the Federal funds rate.

Correct. More specifically, the Federal Open Market Committee, which meets eight times a year to set the target for the fed funds rate.

You might be interested in

1. Describe the effect each action below will have on the money supply. Explain your reasoning.

makkiz [27]

The Fed sells $5 billion worth of T-bonds on the open market.

5 0

3 years ago

Navy Corporation has E&P of $240,000. It distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to

anastassius [24]

Answer:

a. A taxable dividend of $15,000

Explanation:

The relevant variables are the friar market value and the tax liability on the land.

The fair market value is the amount at which an asset or a company will be exchanged between a knowledgeable willing seller and a knowledgeable willing seller in an ordinary transaction in the market. Put simply, the fair market value of an asset gives an estimation of the price that a buyer would pay to the owner of the asset if the owner decides to sell the asset.

When a company distributes an asset as a dividend to the owner, any liability taken over on the assets will be deducted from the fair market value of the asset to arrive at the taxable dividend.

From the question, the $55,000 tax liability assumed by Troy will be deducted from the fair market value of the asset to obtained the taxable dividend as follows:

Taxable dividend = Fair market value - Tax liability on the land

= $70,000 - $55,000

= $15,000

Therefore, the taxable dividend is $15,000.

3 0

3 years ago

U.S. GAAP for long-lived assets significantly impedes rate-of-return comparisons across companies unless the firms:

kap26 [50]

Answer: Apply the same depreciation methods and the same useful lives among similar groups of assets

Explanation:

US GAAP for long-lived assets significantly impedes rate-of-return that is, the annual income from an investment which is being expressed as a proportion of the original investment comparisons across companies unless the firms apply the same depreciation methods and also the same useful lives are applied among identical groups of assets.

6 0

3 years ago

Mervon Company has two operating departments: Mixing and Bottling. Mixing occupies 26,220 square feet. Bottling occupies 17,480

nordsb [41]

Answer and Explanation:

Given:

Mixing department occupies = 26,220 square feet

Bottling department occupies = 17,480 square feet.

Total maintenance costs = $204,000

Computation of total area:

Total area = (26,220 + 17,480) square feet

Total area = 43,700 square feet

Computation of mixing department maintenance costs:

Mixing department maintenance costs = Total maintenance costs(Mixing department area / Total area)

Mixing department maintenance costs = $204,000(26,220 / 43,700)

Mixing department maintenance costs = $204,000(0.6)

Mixing department maintenance costs = $122,400

Computation of bottling department maintenance costs:

Bottling department maintenance costs = Total maintenance costs(Bottling department area / Total area)

Bottling department maintenance costs = $204,000(17,480 / 43,700)

Bottling department maintenance costs = $204,000(0.4)

Bottling department maintenance costs = $81,600

5 0

3 years ago

suppose the real rate is 3.4 percent and the inflation rate is 5 percent. what rate would you expect to see on a treasury bill?

Ghella [55]

the rate expected on the treasury bill is 8.57%. enter answer as a percent rounded to 2 decimal places.

The real rate is 2.1 percent

The inflation rate is 3.4 percent

To find the rate which is to be expected on a treasury bill we have to apply fisher's equation

1+R= (1+r)(1+h)

Therefore, the rate on the treasury bill can be calculated as follows

1+R= (1+r)(1+h)

r= 3.4%

= 3.4/100

= 0.034

h= 5%

= 5/100

= 0.05

R= (1+r)(1+h)-1

= (1+0.034)(1+0.05)-1

= (1.034×1.05)-1

= 1.0857-1

= 0.0857×100

= 8.57%

A Treasury invoice (T-invoice) is a brief-term debt obligation backed via the U.S. Treasury Department with an adulthood of one year or less. Treasury bills are generally bought in denominations of $1,000 even as a few can attain a denomination of $five million.

let's say an investor purchases a par price of $1,000 T-bill with an aggressive bid of $950. whilst the T-invoice matures, the investor is paid $1,000, thereby income $50 in interest on the funding.

U.S. Treasury bills are auctioned on a regular schedule. individuals should purchase T-payments from the government using the TreasuryDirect internet site. it is free to register, and it'll function like a brokerage account that holds your bonds. in addition to bidding on new troubles, You also can install reinvestments into securities of an equal type and time period. as instance, you can use the proceeds from a maturing fifty-two-week invoice to shopping for some other fifty-two-week invoice. sure brokerage corporations can also permit buying and selling in U.S. Treasuries.

To learn more about treasury bills visit here:

brainly.com/question/17204626

#SPJ4

7 0

1 year ago