Answer:
increases the number of dollars in the hands of the public and decreases the number of bonds in the hands of the public.
Explanation:
Open market operations is one of the tools used by regulatory agencies to control supply of cash in the economy. This is done to control economic indices like inflation and deflation.
During open market operations the regulatory body can sell securities to reduce cash in the economy or buy securities to increase cash supply.
In this instance an open market purchase involves buying of securities from the public. The public will have more cash on hand and less of the securities (bonds).
Answer:
Explanation:
A. Solving for P yields P =0011dsiiuuγβββ−−+; thus 21(,)susCov P uσβ−=.Because Cov(P,u) ≠0, the OLS estimator is inconsistent.
B. We need an instrumental variable, something that is correlated with P but uncorrelated with us. In this case Q can serve as the instrument, because demand is completely inelastic (so that Q is not affected by shifts in supply). γ0can be estimated by OLS (equivalently as the sample mean of Qi
Answer:
The maximum that Marco is willing to pay to buy ABC Co. today is $23967.0645
Explanation:
The maximum amount that Marco will be willing to pay today will be the present value of the expected cash flows discounted at the required rate of return. Using the discounted cash flows approach also known as DCF approach, we can calculate the present value of the cash flows,
Present Value = CF1 / (1+r) + CF2 / (1+r)^2 + ... + CFn / (1+r)^n
Where,
- CF is the cash flow
- r is the required rate of return
Present value = 5000 / (1+0.12) + 10000 / (1+0.12)^2 + 16200 / (1+0.12)^3
Present value = $23967.0645
The maximum that Marco is willing to pay to buy ABC Co. today is $23967.0645
Answer: $46000
Explanation:
The manufacturing overhead for the month will be calculated as:
Indirect labour = $15000
Add: Indirect material = $4000
Add: Factory electricity gas = $8000
Add: Factory supervisor salary = $12000
Add: Depreciation on factory building = $7000
Therefore, the total manufacturing overheads would be gotten by adding the above values together whihc will be equal to $46000.
