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kow [346]
2 years ago
12

The desired reserve ratio is 10 percent of deposits, and the currency drain ratio is 1 percent of deposits.

Business
1 answer:
Flauer [41]2 years ago
4 0

Answer:

Quantity of money changes by $50,000,000

Explanation:

Desired reserve ratio = 10% = 0.1

Currency drain ratio = 1% = 0.01

Money multiplier = (1+0.1) / (0.1+0.01) = 1.1/ 0.11 = 10

Value of securities purchased = $5 million

Change in quantity of money :

$5 million * 10 = $50 million

Currency created : currency drain ratio * change in quantity of money

0.01 * $50,000,000 = $500,000

Amount of bank deposit = quantity change - currency created

= $50,000,000 - $500,000 = $4,500,000

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In the primary market investors buy securities directly from the company issuing them while the secondary market, investors trade securities among themselves, and the company with the security being traded does not participate in the transaction. Therefore, an example of a primary market transaction would be the sale of 1000 shares of newly issued stock by Alt Company to Miquel.
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3 years ago
Montross Lumber processes wood to be shipped to construction companies. In order to keep its products uniform, Montross conducts
tiny-mole [99]

Answer:

$450

Explanation:

Activity based costing is the process by which a business allocates cost on the basis of the number of times an activity is carried out.

For example if different departments use a photocopier to copy 3,000, 5,000, and 2,000 sheets. The total cost will be allocated based on amount of activity per department.

In this instance

Total number of boards= 36,000

Inspections= 5% of the total

Inspection cost= $15 per hour

Percentage that will be inspected= 0.05 * 36,000 = $1,800

It takes one minute to inspect each board, there are 60 minutes in one hour. So 60 boards are inspected in one hour.

Number of inspection hours= 1,800 ÷ 60= 30 hours

Total cost of inspection= Cost per hour * Number of hours

Total cost of inspection= 15 * 30= $450

7 0
3 years ago
Assume that in a private, closed economy consumption is $240 billion and investment is $50 billion, both at the $280 billion lev
adell [148]

Answer:

D. unplanned increases in inventories of $10 billion will occur

Explanation:

5 0
3 years ago
Credit risk measures using the structural model: assume a company has the following characteristics.
Alexeev081 [22]

Answer:

a ) Probability of default of debt over the time to maturity is 12.92%

(b ) Expected loss: $39.53

(C ) Present value of expected loss is $45.59

Explanation:

a ) Probability of default of debt over the time to maturity is 12.92%

(b ) Expected loss: $39.53

(C ) Present value of expected loss is $45.59.

Values calculated as shown in my detailed step by step answer at the attachment.

please kindly refer to attachment.

4 0
3 years ago
Direct Materials, Direct Labor, and Factory Overhead identify the following costs as direct materials, direct labor, or factory
Alexeev081 [22]

Answer:

a. Staples used to bind magazines - <u><em>Direct Material</em></u>

The staples are integral to holding the magazines so is a direct material.

b. Wages of printing machine employees. - <em><u>Direct Labor</u></em>

The printing machine employees are directly related to the magazine's production as they print it.

c. Maintenance on printing machines. -<em><u> Factory Overhead</u></em>

This cost is not directly associated with the publishing of the magazine so is an overhead.

d. Paper used in the magazine. -<em><u>Direct Material</u></em>

Without paper, the magazine can not be published which makes it a direct material.

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3 years ago
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