Answer:
The correct answer is option A.
Explanation:
The statement given above says that bond prices vary inversely with changes in market interest rate. It means that there is an inverse relationship between bond prices and the market interest rate.
In other words, when the market interest rate falls, the bond prices will rise and when there is an increase in market interest rate, the bond prices will fall. The bond price and market rate of interest are negatively related.
Answer:
to earn money to feed their families, to pay their bills, to go places,
Explanation:
Answer:
$380 million
Explanation:
Given that,
Deposits = $120 million
Required reserve ratio = 20 percent
Total bank reserves = $100 million
Required reserve ratio refers to the portion of deposits that is kept with the reserve bank.
Required reserves:
= Deposits × Required reserve ratio
= $120 million × 0.2
= $24 million
Excess reserves:
= Total reserves - Required reserves
= $100 - $24
= $76
So, there is a excess reserves in this economy.
Money multiplier = 1/Required reserve ratio
= 1/0.2
= 5
Therefore, the total money creation potential of this deposit is as follows:
= Excess reserves × Money multiplier
= $76 × 5
= $380 million
Hence, an increase in deposit creation by $380 million.
Answer: a. it is a non-cash expense, so it needs to be added back to net income when using the indirect method.
Explanation: Depreciation is the measurement of the decline in value of assets. When using the indirect method, since net income is a starting point in measuring cash flows from operating activities, depreciation expenses must be added back to net income. Depreciation is a source of cash inflow because it is a tax-deductible non-cash expense as a result it provides a tax reduction benefit which increases cash flow.
When you make sure you are using up-to-date information, you are using current information.
