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kicyunya [14]
3 years ago
15

Consider a world in which there is no currency and depository institutions issue only transactions deposits and desire to hold n

o excess reserves. The required reserve ratio is
Business
1 answer:
nataly862011 [7]3 years ago
8 0

Consider a world in which there is no currency and depository institutions issue only transactions deposits and desire to hold no excess reserves. The required reserve ratio is 15 percent. The central bank sells ​$0.98 billion in government securities.

What happens to the money supply?

Give reasons to support your answer.

Answer:

The answer is below

Explanation:

Considering the situation described above, the result is that there will be a DECREASE in the money supply of $6.53 billion.

This is because the money multiplier is calculated as 1/rr, where RR is the reserve ratio.

Hence, in this case, we have 1/0.15 = 6.67

Therefore, 6.67 × $0.98 billion = $6.53 billion.

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Economists study decisions made at the margin by consumers by studying?
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Answer: Comparative advantage

Explanation:

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4 years ago
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If interest rates fall in the USA relative to the rest of the world the demand for US dollar will ________ because there is less
kifflom [539]

Answer:

a. decrease/lower

Explanation:

In the case when the rate of interest declines in the USA as compared with rest of the word, the demand of the dollar of the US would decrease as it represents the lesser demand for the assets with the lesser returns

Therefore as per the given situation, the option a is correct

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3 years ago
Suppose that real GDP equals $10 trillion, nominal GDP equals $20 trillion, and the aggregate price level equals 2.
Archy [21]

Answer:

b) $10 trillion

Explanation:

Price level = NGDP / RGDP = 2

NGDP / RGDP = 2

As per the quantity theory of money,

MV = PQ

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Therefore, The  money supply is $10 trillion.

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The following data relate to factory overhead cost for the production of 6,000 computers: Actual: Variable factory overhead $142
Damm [24]

Answer:

1. $4,400 Favorable

2. $14,000 Unfavorable

3. $9,600 Unfavorable

Explanation:

The computation of given question is shown below:-

1. Variable factory overhead Controllable Variance

= $142,600 - 6,000 × 24.5

= $142,600 - $147,000

= -$4,400

= $4,400 Favorable

Where, 24.5 = standard rate - fixed overhead rate

= $28 - $3.5

= $24.5

2. Fixed factory overhead volume variance

= $35,000 - 6,000 × $3.5

= $35,000 - $21,000

= $14,000 Unfavorable

3. Total factory overhead cost variance

= ($142,600 + $35,000) - (6,000 × $28)

= $177,600 - $168,000

= $9,600 Unfavorable

5 0
4 years ago
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