Banks create cash by using lending extra reserves to buyers and businesses. This, in turn, finally provides greater to money in circulation as dollars are deposited and loaned again.
The Fed does not really print money. This is treated through the Treasury Department's Bureau of Engraving and Printing.
<h3>How is money created in the economy?</h3>
Most of the money in our economy is created by using banks, in the form of financial institution deposits – the numbers that show up in your account. Banks create new money each time they make loans. 97% of the money in the financial system today exists as financial institution deposits, at the same time as simply 3% is physical cash.
<h3>How do commercial banks create money?</h3>
Commercial banks make cash through imparting and earning activity from loans such as mortgages, auto loans, business loans, and personal loans. Customer deposits provide banks with the capital to make these loans.
Learn more about creating money here:
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brainly.com/question/3625390</h3><h3 /><h3>#SPJ4</h3>
Answer:
It is cheaper to make the part.
Explanation:
Giving the following information:
The cost of producing 40,000 parts is $138,000, which includes fixed costs of $68,000 and variable costs of $70,000. The company can buy the part from an outside supplier for $3.50 per unit and avoid 30% of the fixed costs.
<u>The cost of making the part is $138,000. That will be the cost in the income statement. </u>
We can calculate the effect on income if they buy the part.
Buy:
Selling pirce= 3.5
Savings in fixed costs= (0.3*70,000)= 21,000
Total cost= 3.5*40,000 + 70,000 - 21,000= $189,000
It is cheaper to make the part.
Answer:
Longard Corp.
The money that Longard Corp. receives is:
= $75 million.
Explanation:
a) Data and Calculations:
Number of shares issued = 5 million
Investment bank underwriter pays per share to Longard Corp = $15
Stock price to the public = $20 per share
Total amount received from the underwriter = $75 million ($15 * 5 million)
b) The calculations show that the investment bank will eventually receive $100 million ($20 * 5 million) from the public offer. It then charges $5 per share (representing a total underwriting fee of $25 million). This is why it remits only $75 million to Longard Corp.
Answer:
Discount on bonds issuance = $15750
Explanation:
A bond is issued at a discount when the issue price of the bond is less than the face value of the bond. This usually happens when the coupon rate paid by the bond is less than the market interest rate. To calculate the amount of discount on bonds issuance, we simply deduct the issue price from the face value of the bond. Thus,
Discount on Bonds = Face value - Issue price
As we know the face value of the bonds is $700000 and the issue price is $684250, we can calculate the discount on issuance to be,
Discount on bonds issuance = 700000 - 684250
Discount on bonds issuance = $15750
Answer: $3,564.50
Explanation:
The total amount that the company will pay for the merchandise is the net cost of the merchandise, less a 3% cash discount, plus the transportation costs. The cash discount normally only applies to the merchandise and not the transportation costs.
The cost of the merchandise is $3,600 less the $250 refund, which equals $3,350. With a 3% cash discount they will pay 97% of this amount, which is $3,249.50. After adding the additional transportation charge of $315, the total amount to be paid is $3,564.50.
