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Natali5045456 [20]
3 years ago
11

Suppose the money supply (as measured by checkable deposits) is currently $850 billion. The required reserve ratio is 20%. Banks

hold $170 billion in reserves, so there are no excess reserves. The Federal Reserve ("the Fed") wants to decrease the money supply by $42.5 billion, to $807.5 billion. It could do this through open-market operations or by changing the required reserve ratio. Assume for this question that you can use the simple money multiplier.
1. If the Fed wants to decrease the money supply using open-market operations, it should (buy / sell)$_____billion worth of U.S. government bonds.
2. If the Fed wants to decrease the money supply by adjusting the required reserve ratio, it should_______the required reserve ratio.
Business
1 answer:
Dmitrij [34]3 years ago
7 0
The proposal was incidental to a plan to require gold certificate reserves be kept behind Federal Reserve notes. No.
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The Two Sisters has a return on assets of 9 percent and a dividend payout ratio of 75 percent. What is the internal growth rate
Anettt [7]

The internal growth rate of a firm is best described as the: A. minimum growth rate achievable assuming a 100 percent retention ratio. B. minimum. The tax rate and the dividend payout ratio will be held constant. Current and. The Two Sisters has a 9 percent return on assets and a 75 percent retention ratio.

hope this helps.

7 0
3 years ago
Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of 7%, and a face value of $1000. Wyatt
enyata [817]

Complete question:

Security Term (years) Yield (%)

Treasury 2 0 5.5%

AAA Corporate 2 0 7.0%

BBB Corporate 20 8.0%

B Corporate 2 0 9.6%

Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of  7%, and a face value of $1000. Wyatt Oil believes it can get a BBB rating from Standard and  Poor's for this bond issue. If Wyatt Oil is successful in getting a BBB rating, then the issue price  for these bonds would be closest to:

A) $891 B) $901 C) $1,000 D) $800

Answer:

If Wyatt Oil is successful in getting a BBB rating, then the issue price  for these bonds would be closest to:  $901

Solution:

Given,

FV = 1000,

N = 40,

I = 4,

PMT = 35

Compute PV ,

PV = FV \frac{1}{( 1+r)^{n} }

PV = 901.04

If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to: $901

5 0
3 years ago
CSU Co. just paid a dividend of $1.4 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent
boyakko [2]

Answer:

$16.93

Explanation:

Current stock price = dividend ( 1 + growth rate) / required return - growth rate

$1.4(1.04) / 0.126 - 0.04 = $16.93

8 0
3 years ago
All of the following are true of the real interest rate except it Is equal to the nominal interest rate minus the anticipated ra
Lynna [10]

Answer:

Equals the foreign exchange rate minus the inflation rate.

Explanation:

Nominal rate of interest refers to the interest rate which does not account for rate of inflation.

It is expressed as

Nominal interest rate = Real interest rate + rate of inflation

Real interest rate is considered to be a better measure since it is adjusted for rate of inflation.

Foreign exchange rate refers to exchange rate between two currencies which is based upon inflation and interest rates prevailing in the respective countries.

5 0
3 years ago
Economic Order Quantity computes:
Mamont248 [21]

Answer:

D: Optimum Order size​

Explanation:

Economic Order Quantity (EOQ) is a formula applied in logistic and supply chain management to calculate a business's ideal order size. As the name suggests, the order EOQ provides an order quantity that makes economic sense.

Economies of scale suggest that a bigger order size is better because the business will save transport costs. However, ordering in large quantities increases the cost of holding stock. The economic order quantity strikes a balance between these two important factors.

7 0
3 years ago
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