Answer:a.
It would increase by $500,000 multiplied by the reciprocal of the required reserve ratio.
Explanation:
A bank will often hold government securities as an asset. If a bank were to sell S500,000 in government securities to an individual who paid for the bond in cash and the bank placed this cash in its vault, by how much would the money supply change as a result - It would increase by $500,000 multiplied by the reciprocal of the required reserve ratio.
The money supply is the entire stock of currency and other liquid instruments circulating in a country's economy and is given by the formula:
MONEY SUPPLY = RESERVES X MONEY MULTIPLIER
Therefore the bank reserves increasing in the scenario will increase money supplier by the effect of the money multiplier or the reciprocal of the required reserve ratio.
The way where the credit is not improved is that if we moving the debt around.
Information related to the credit score & creditworthiness:
- The credit score is the mathematical expression that depends upon your creditworthiness.
- Creditworthiness is the willingness of the lender for believing you to pay off the debts.
The credit should be improved by:
- Having established accounts.
- Bills are paid on time
- Less balances.
But if the debt is moving around so this does not improve your credit.
Therefore we can conclude that the way where the credit is not improved is that if we moving the debt around.
Learn more about creditworthiness here: brainly.com/question/2254218
Overall, Snead's Snack Bar earned more in July, with $2600, while in June they only earn $2500
Answer:
DR. CR.
Rent Expense $3,000
Prepaid Rent $3,000
Explanation:
Rent paid in advance = $6,000
Rent paid for the period of 8 months. On December 31, 4 months has been passed. So the rent of only 4 month will be accrued.
Accrued Rent = $6,000 x ( 4 / 8)
Accrued Rent = $3,000
Expense accrued and transferred from the prepaid rent account to rent expense account.
