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Vesna [10]
2 years ago
10

Assume that there is a 25 percent reserve ratio and that the Federal Reserve buys $4 billion worth of government securities. If

the securities are purchased from the non-bank public, this action has the potential to increase money supply by a maximum of:
Business
1 answer:
timofeeve [1]2 years ago
8 0

Answer: $16 billion, and also by $16 billion if the securities are purchased directly from commercial banks

Explanation:

Since we are given a 25% reserve ratio, then the money multiplier will therefore be:

= 1/25%

= 1/0.25

= 4.

Therefore, the money supply will be increased to (4 billion × 4) = 16 billion.

Therefore, the answer is "$16 billion, and also by $16 billion if the securities are purchased directly from commercial banks".

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Ilia_Sergeevich [38]

Answer:

The correct option is : b. When volume increases, but at a nonconstant rate.

Explanation:

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The curvilinear costs does not increase linearly with the production. Therefore, curvilinear cost is also called a nonlinear cost.

<u>Therefore, curvilinear costs always increase at a nonconstant rate with the increase in the production volume.</u>

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Hi again!

I don't know why but I feel like your questions are funny at the same time.

Anywayz, the correct answer is option C

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3 years ago
Read 2 more answers
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Answer:

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