All categories

3 years ago

The central bank buys $15,000 worth of bonds in the open market from Christopher, who

Business

1 answer:

vladimir2022 [97]3 years ago

4 0

Answer:

(a) What is the amount by which Carla Bank's liabilities have changed?

Carla Bank's liabilities increased by $15,000 (bank deposits are liabilities).

(b) Calculate the change in required reserves for Carla Bank.

Carla Bank's reserves must increase by $15,000 x 5% = $750

(c) What is the dollar value of the maximum amount of new loans Carla Bank can initially make because of Christopher's deposit?

Carla Bank can loan $15,000 x 95% = $14,250

(d) Based on the central bank's open-market purchase of bonds, calculate the maximum amount by which the money supply can change throughout the banking system.

Money multiplier = 1 / 5% = 20

The money supply has the potential to increase by $15,000 x 20 = $300,000

(e) How will the change in the money supply in part (d) affect aggregate demand in the short run? Explain.

Aggregate demand will increase since the total money supply increases. This should also help to decrease the interest rates and foster investment.

You might be interested in

ABC Vehicles expects the worldwide demand for new hybrid vehicles to reach 5 million by 2016. However, the demand for new hybrid

Olin [163]

Answer:

The correct answer is c. firm-level demand

Explanation:

Demand can be defined as the quantity of goods and services that are acquired by consumers at different prices, at a specific unit of time (one day, one month, one year, etc.) since without a temporary parameter we cannot say if a Demand amount grows or decreases.

When a person chooses to buy some good, to meet his needs, he does so consciously, based on his criteria both objective and subjective; These conditions are modified according to the educational and socioeconomic level, sex, age, among other factors.

7 0

3 years ago

Mnemonics are a tool to aid which of the following?

scoray [572]

Answer:

B. Memory

Explanation:

Mnemonics are a tool to aid memory.

5 0

3 years ago

On a total product curve with labor on the horizontal axis, the inflection point represents the quantity of labor where

emmainna [20.7K]

The appropriate response is the marginal product of labor is at its most elevated. In financial aspects, the marginal product of labor (MPL) is the adjustment in yield that outcomes from utilizing an additional unit of work. The minimal result of an element of generation is by and large characterized as the adjustment in yield-related with an adjustment in that component, holding different contributions to creation steady.

3 0

3 years ago

Grateful Eight Co. is expected to maintain a constant 4.6 percent growth rate in its dividends indefinitely. If the company has

ad-work [718]

Answer:

11%

Explanation:

To address this exercise, we need to recall the formula for dividend discounted model (DDM). The DDM is stated as below:

Stock intrinsic value = Next year dividend/(Required rate of return - Long term growth)

Rearrange a bit this formula, we have:

Next year dividend/Stock intrinsic value = Required rate of return - Long term growth, or

Dividend yield = Required rate of return - Long term growth

Putting all the number together, we have:

6.4% = Required rate of return - 4.6% or Required rate of return = 11%

7 0

3 years ago

Miranda is a network engineer. She has been hired to set up a network for a nonprofit organization with more than

sweet [91]

Answer:

hi your question lacks the options hence i will list out some factors to be considered :

The goal of the network
The training of the employees on how to use it
The budget of the organization
The maintenance

Explanation:

A network engineer is a professionally trained technology expert that his primary duty is to setup a computer network within an organization that enables the exchange of voice, data and video within the organization.

A network engineer has to consider some factors while performing his duties in other to do an excellent job for the organization and some factors to be considered are. the goal of the network which simply means that the network service required by the organization of what purpose do they want it, the training of the employees on how to use the network is also considered by the engineer the most important which is the budget of the organization and the maintenance of the network after it has been setup.

4 0

3 years ago