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3 years ago

To stimulate the economy, the Federal Reserve decides that the amount of money in circulation

Business

1 answer:

max2010maxim [7]3 years ago

7 0

Answer:

Lower the reserve requirement ratio

Explanation:

Stimulating the economy requires expansionary monetary policies. These are the actions that increase the money supply in the economy. When there is an increase in the money supply, people and businesses have more money to spend. An increase in spending means a higher demand for goods and services, which motivates increased production.

Reserves requirement is the proposition of customer deposits that commercial banks retain in their custody at all times. A reduction in the reserve requirement ratio implies that banks can loan out a larger proportion of customer deposits. The amount of money available for banks to issue out as loan increases. An increase in lending adds to the money supply in the economy, which, in turn, stimulates economic activities.

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The consumer price index (CPI) is calculated a. using a fixed basket of goods and, therefore, will tend to understate inflation.

jasenka [17]

Answer: b. using a fixed basket of goods and, therefore, will tend to overstate inflation.

Explanation:

CPI uses a fixed basket of goods each year and measure inflation by monitoring the changes in this basket over several years/ periods.

This has the tendency to overstate inflation however, due to three(3) main reasons: Substitution bias, Quality bias and New product bias.

With substitution bias, the CPI does not take into account that when products increase in price, people will substitute them for lower priced goods. Quality bias means that CPI does not account for change in quality. New Product bias means that CPI does not account for new and better products as it uses a fixed basket.

Put together these three can cause CPI to overstate inflation by as much as 1% sometimes.

7 0

3 years ago

Wilberton's has total assets of $537,800, net fixed assets of $412,400, long-term debt of $323,900, and total debt of $388,700.

sleet_krkn [62]

Answer:

Current Ratio=1.93518

Explanation:

$Current\ Ratio=\frac{Current\ Assets}{Current\ Liabilities}$

Calculating Current Assets:

Current Assets=Total assets-Net fixed assets

Current Assets=$537,800- $412,400

Current Assets=$125,400

Current Liabilities=Total debt- Long-term debt

Current Liabilities=$388,700- $323,900

Current Liabilities=$64,800

Current Ratio= $\frac{\$125,400}{\$64,800}$

Current Ratio=1.93518

5 0

4 years ago

Outstanding stock of the Blossom Corporation included 30000 shares of $5 par common stock and 8000 shares of 5%, $10 par non-cum

Arlecino [84]

Answer:

$6,500 was distributed to preferred shareholders

Explanation:

Dividend distributed to preferred share is based on the predetermined rate associated with these share. When the dividend is declared preferred share dividend is paid first. The remainder is distributed between the common stockholders.

Value of Preferred share = 8000 shares x $10 par value = $80,000

Preferred Dividend = $80,000 x 5% = $4,000

Accrued dividend of 2016 = $4,000 - $1500 = $2500

Total Dividend Accrued = $2,500 + $4,000 = $6,500

3 0

3 years ago

Formal planning means specific goals are formulated and never reduced to writing but simply communicated.

Alexxx [7]

The statement that formal planning means specific goals are formulated and never reduced to writing but simply communicated is false.
In opposite formal planning is type of strategic planning that includes writing of the organization's goals and objectives. The given definition refers to the informal planning.

3 0

3 years ago

Build a loan amortization schedule using goal seek. The info of the loan:

Savatey [412]

Answer:

The amortization schedule and the formula is shown in the table attached below

Explanation:

Download docx

docx

5 0

3 years ago