Selling bonds to banks methods of government deficit finance is MOST likely to crowd out private investment
What is crowding out of private investment?
Definition: A situation when increased interest rates lead to a reduction in private investment spending such that it dampens the initial increase of total investment spending is called crowding out effect.
How government deficits can crowd out private investment?
If budget deficits are to be financed by borrowing, interest rates must rise so that capital markets can reach equilibrium. High interest rates, in turn, result in a decreased investment, hence the crowding-out effect.
What does it mean for banks to sell bonds?
When a central bank buys bonds, money is flowing from the central bank to individual banks in the economy, increasing the money supply in circulation. When a central bank sells bonds, then money from individual banks in the economy is flowing into the central bank—reducing the quantity of money in the economy.
Learn more about selling bonds to banks method:
brainly.com/question/15605846
#SPJ4
Answer:
74.46%
Explanation:
Since the project has a chance of doubling investment, it has a chance of making a +100% return. The project also have a chance of losing half of its investment that is -50% return. The expected return E(r) is given by:
E(r) = chance of doubling investment + chance of losing half of its investment
E(r) = 0.44(100%) + 0.56(-50%) = 0.44(1) + 0.56(-0.5) = 0.44 - 0.28 = 0.16
σ² = 0.44(100% - E(r))² + 0.56(-50%-E(r))² = 0.44(1 - 0.16)² + 0.56(-0.5 - 0.16)² = 0.310464 + 0.243936 = 0.5544
σ = √σ² = √0.5544 = 0.7446 = 74.46%
The standard deviation is 74.46%
Answer:
$22,050 favorable
Explanation:
The computation of the fixed overhead product - volume variance is shown below:
Fixed overhead volume variance is
= Actually applied amount - the budgeted amount
= ($239,400 ÷ 38,000 units × $41,500) - ($239,400)
= $261,450 - $239,400
= $22,050 favorable
We simply applied the above formula so that the fixed overhead product - volume variance could come
Answer:
The correct answer is B: $4,300
Explanation:
Giving the following information:
Howell Corporation purchased a new machine costing $27,600 on January 1, 2017. The machine is expected to have a $1,800 salvage value at the end of its useful life of six years.
Depreciation= (purchase value - salvage value)/ useful life
Depreciation= (27600 - 1800)/6= 4300