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soldier1979 [14.2K]
3 years ago
15

Suppose foreigners find U.S. goods and services more desirable for some reason other than a change in the exchange rate. Which p

olicies could be used to offset the resulting change in output? a. a decrease in the money supply and a decrease in government purchases. b. a decrease in the money supply and an increase in government purchases. c. an increase in the money supply and a decrease in government purchases. d. an increase in the money supply and an increase in government purchases.
Business
2 answers:
Mashcka [7]3 years ago
8 0

Answer:

The correct answer is option a.

Explanation:

If foreigners find US  goods and services more desirable, they will demand more of these goods and services. The price level will increase. The domestic firms will start producing more to earn higher revenue and profits. The output level will increase.

To offset this increase in output the government will decrease money supply in the economy. To do so the government can adopt several measures. Government can adopt contractionary monetary or fiscal policy. Government can reduce money supply by reducing purchases.

alekssr [168]3 years ago
5 0

Answer: Option (a) is correct.

Explanation:

Correct Option:  A decrease in the money supply and a decrease in government purchases.

If US goods and services are more desirable for foreigners then the exports of united states increases. Therefore, the earnings from the exports increases and hence, there will be more money in the market which increases the money supply in an economy.

So, the fed uses the Contractionary monetary policy and fiscal policy to offset the resulting change in output.

∴ Contractionary monetary policy will results in decrease in the money supply and Contractionary fiscal policy will results in decrease in government purchases.

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You’ve been specially selected to win our grand prize. Contact us to collect it!” This is probably a scam.

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3 years ago
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Silver Inc. has budgeted production costs of $3,000,000, budgeted beginning finished goods inventory of $390,000, and budgeted e
Pavlova-9 [17]

Answer:

Budgeted cost of goods sold = $3,150,000

Explanation:

Given:

Budgeted beginning finished goods inventory = $390,000

Budgeted production costs = $3,000,000

Budgeted ending finished goods inventory = $240,000

Find:

Budgeted cost of goods sold

Computation:

Budgeted cost of goods sold = budgeted beginning finished goods inventory + budgeted production costs - budgeted ending finished goods inventory

Budgeted cost of goods sold = $390,000 + $3,000,000 - $240,000

Budgeted cost of goods sold = $3,150,000

4 0
3 years ago
What is speculative risk?
Stels [109]

Answer:

A speculative risk is uncertain degree of gain or loss.                                                            Every speculative risk are made as conscious choices and are not just a result of uncontrollable circumstances.

Explanation:

It's basically a conscious choice you made!

3 0
3 years ago
The name for computations that allow you to determine how much money to deposit now to earn a desired amount in the future is
nydimaria [60]

Answer:

Future value

Explanation:

The name for computation that allows you to determine how much money to deposit now to earn a desired amount in the future is "Future value." Future value is the equivalent of an asset at a particular date. It estimates specific nominal future sum of cash that an invested sum of money is "worth" at a stipulated period in the future considering a specific interest rate, or more commonly, rate of interest; it is the immediate price multiplied by the aggregation function.

5 0
3 years ago
Jim is evaluating project that will pay him $5,000 per year for 5 years, and then cost him $4,000 per year for 12 years. Jim’s o
FinnZ [79.3K]

Answer:

4.25%

Explanation:

We need to calculate the net present value of the cash flows to determine the  IRR.

NPV = PV of Cash inflows - PV of Cash outflows

As the cash inflow and outflow are fixed for specific period of time so, we will use the annuity formula to calculate the NPV.

NPV = [ $5,000 x ( 1 - ( 1 + 18% )^-5) /18% ] - [ ( $4,000 x ( 1 - ( 1 + 18% )^-12) /18%) x ( 1 + 18%)^-6 ]

NPV = $15,636 - $7,102 = $8,534

We need NPV on a higher rate of 10%

NPV = [ $5,000 x ( 1 - ( 1 + 10% )^-5) /10% ] - [ ( $4,000 x ( 1 - ( 1 + 10% )^-12) /10%) x ( 1 + 10%)^-6 ]

NPV = $18,954 - $15,385 = $3,569

IRR = Lower rate + [ Lower rate NPV / (Lower rate NPV - Higher rate NPV) ] (higher rate - lower rate)

IRR = 10% + [ 3,569 / ($3,569 - $8,534) ] (18% - 10%)

IRR = 4.25%

4 0
3 years ago
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