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Answer:
c. can be implemented quickly, but most of its impact on aggregate demand occurs months after policy is implemented.
Explanation:
A monetary policy can be defined as the actions (macroeconomic policies) adopted and undertaken by the central bank of a particular country to control the money supply and interest rates so as to boost or enhance economic growth. The central bank uses monetary policies to manage inflation, economic growth through long-term interest rates and level of unemployment in a country. In order to boost economic growth, monetary policy is used to increase money supply (liquidity) while it is also used to prevent inflation by reducing money supply.
Generally, money supply comprises of checks, cash, money market mutual funds (MMF) and credit (mortgage, bonds and loans).
Typically, a monetary policy can be implemented quickly by the central bank of a particular country, but most of its impact on aggregate demand occurs months after policy is implemented.
Answer:
After-tax cost of deb = 6%
Explanation:
<em>The cost of debt is the required rate of return payable to investors in the debt instruments of a company. These investors include providers of long term debt finance to the company.</em>
<em>The cost of debt finance can determined by working out the yield to maturity on debt with adjustment for tax. </em>
<em>It is noteworthy that debt finance affords the company a tax savings advantage because interest expense incurred on the use of debt of are tax deductible expense.</em>
After-tax cost of debt = (1- Tax rate) × before-tax cost of debt
Before tax cost of debt = 10%
Tax rate = 40%
After-tax cost of debt = (1-0.4) × 10% = 6%
After-tax cost of deb = 6%