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Ivahew [28]
3 years ago
11

Suppose there is a rash of pickpocketing. As a result, people want to keep less cash on hand, decreasing the demand for money. A

ssume the Fed does not change the money supply. According to the theory of liquidity preference, the interest rate will _______, which causes aggregate demand to ______. If instead the Fed wants to stabilize aggregate demand, it should _______ the money supply by _______ government bonds.
Business
2 answers:
Goshia [24]3 years ago
4 0

Answer:

Fall & rise

decrease & selling

Explanation:

The Liquidity Preference Theory in all  stated  that the demand for money is not necessary to borrow money but the desire to remain liquid that is there will be money is the interest rate Keynes in his definition of the  liquidity preference theory stated the 3 motives behind this theory;they are;

a.  transactions motive

b.  precautionary motive

c. speculative motive

Ganezh [65]3 years ago
3 0

Answer:

Fall;rise.

Decrease;selling.

Explanation:

Suppose there is a rash of pickpocketing. As a result, people want to keep less cash on hand, decreasing the demand for money. Assume the Fed does not change the money supply. According to the theory of liquidity preference, the interest rate will fall, which causes aggregate demand to rise.

If instead the Fed wants to stabilize aggregate demand, it should decrease the money supply by selling government bonds.

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Eastport Inc. was organized on June 5, Year 1. It was authorized to issue 300,000 shares of $10 par common stock and 50,000 shar
Kay [80]

Answer:

The journal entries have been given as under;

Explanation:

Cash  15,000*12       Dr.$180,000

Common Stocks 15,000*10  Cr.$150,000

paid in capital-common stock 15,000*(12-10) Cr.$30,000

Cash  5,000*51   Dr.$255,000

Preferred stocks 5,000*50   Cr.$250,000

Paid in Capital-preferred stock 5,000*1         Cr.$5,000

Cash  60,000*15   Dr.$900,000

Common Stocks 60,000*10  Cr.$600,000

Paid in Capital-common stocks   60,000*(15-10)  Cr.$300,000

8 0
3 years ago
Williams Corp. is considering signing contracts that will obligate the firm to purchase 100000 Swiss Francs worth of computer eq
ella [17]

Answer:

$80,000

Explanation:

Given that at the end of each quarter, William corporation will purchase 100,000 Swiss francs worth of computer equipment for next 2 years. A local high school will still purchase this computer equipment at $89,000 each quarter for the next 2 years.

This means, we have the following:

Cost of purchase = 100,000 * number of quaters = 100,000 * 8 = 800,000

Convert to USD at an exchange rate of $0.79 = 800,000 * 0.79 = $632,000

Cost of purchase in USD = $632,000

Also, find the revenue generated after selling the computer equipments to the high school.

Revenue generated = $89,000 * number of quaters = $89,000 * 8 = $712,000

Williams' profit or loss would be calculated using the following:

Profit(loss) = Revenue generated - Cost of purchase

= $712,000 - $632,000

= $80,000

Since we have a positive value, Williams would make a profit of $80,000 through out the life of the contract.

4 0
3 years ago
Georgia, a widow, has take-home pay of $600 a week from her part-time job. Her disability insurance coverage replaces 70 percent
MariettaO [177]

Answer:

Disability benefit = $5,040

Explanation:

Given:

Pay off per week = $600

Insurance coverage = 70 percent = 0.70

Waiting period = 4 week

Computation of disability benefits:

Disability benefit = Per Week benefit × Total Number of Covered weeks

= (Insurance coverage × Pay off per week) × (off work - Waiting period)

= (0.70 × $600) × (16 - 4)

= $420 × 12

= $5,040

4 0
3 years ago
The publisher of an economics textbook finds that, when the book's price is lowered from $70 to $60, sales rise from 10,000 to 1
ankoles [38]

Answer:

Price elasticity of demand = 2.6

Explanation:

Given:

Old price (P0) = $70

New price (P1) = $60

Old sales (Q0) = 10,000 units

New sales (Q1) = 15,000 units

Computation of Price elasticity of demand(e):

Midpoint method

e=\frac{\frac{Q1-Q0}{\frac{Q1+Q0}{2} } }{\frac{P1-P0}{\frac{P1+P0}{2} } }

By putting the value:

e=\frac{\frac{10,000-15,000}{\frac{10,000+15,000}{2} } }{\frac{60-70}{\frac{60+70}{2} } }\\e=\frac{\frac{-5,000}{\frac{25,000}{2} } }{\frac{-10}{\frac{130}{2} } }\\

e=\frac{\frac{-5,000}{12,500} }{\frac{-10}{65} }

e =  2.6

7 0
3 years ago
A company received a bank statement showing a balance of $78,000. Reconciling items included outstanding checks of $2,400 and a
Kisachek [45]

Answer:

Adjusted Bank Balance = $85,000

Explanation:

Adjustment of bank balance is a bank reconciliation procedure, that is used to match the amount in the bank statement with the amount in the company's balance sheet.

To adjust the bank balance, particulars that need to be subtracted or added to the bank statement balance has to be identified and treated accordingly.

For this example, the adjusted balance is calculated thus:

Adjusted bank balance = (Bank statement balance) - (outstanding checks) +(deposit in transit)

Adjusted Bank Balance = 78,000 - 2,400 + 9,400 = $85,000

Note:

outstanding checks are subtracted because they are payments to be made made by the company, representing a liability to the company (payer)

deposit in transit is an income to the company that has not been credited yet, but that will be credited.

3 0
3 years ago
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