Answer:
Reserve requirements – Reserve requirement increases to decrease the money supply or vice versa.
Open-market activities – the Fed sell the securities to reduce money supply or purchase it to increase the money supply.
Discount rates – Decrease the discount rate to increase the money supply or vice versa.
Explanation:
The Federal Reserve increases or decreases the money supply by using various tools. So in the case of the reserve requirement, the bank increases the percentage of reserve requirement if the Fed wants to decrease the money supply and to increase the money supply it reduces the reserve requirements. In the case of open market operations, the Fed sells securities and bonds in the market in order to reduce the supply of money or to decrease the supply of money it buys the securities from the market.
In the case of a discount rate, the Fed reduces the discount rate to increase the money supply because reducing the discount rate will induce the banks to give more loans. But to decrease the money supply, the Fed increases the discount rate because an increase in the discount rate reduces the ability of banks to give loans.
Answer:
Journal Entry to reflect the event is as follow;
Dr. Cr.
Utility Expense $520
Utility bill payable $520
Explanation:
Utility bill is received it means the expense is accrued and it is not due until the month end so a liability will be created and will be paid next month.
Answer:
Option 1 is correct.
Explanation:
Law of supply indicates that there is a positive relationship between the price of a commodity and the quantity supplied of that commodity. This means that an increase in the price of a commodity then as a result there is an increase in the quantity supplied of that commodity because it will become more profitable for the producers to produce more and supply more.
Answer:
Division's margin = 20%
Turnover = 40%
Return On Investment = 8%
Explanation:
Given:
Sales revenue = $150,000
Operating income = $30,000
Operating assets = $375,000
Find:
Division's margin
Turnover
Return On Investment
Computation:
Division's margin = [Operating income / Sales revenue]100
Division's margin = [30,000 / 150,000]100
Division's margin = 20%
Turnover = [Sales revenue / Operating assets]100
Turnover = [150,000 / 375,000]100
Turnover = 40%
Return On Investment = Division's margin x Turnover
Return On Investment = 20% x 40%
Return On Investment = 8%
