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

calculate the average of each of the following. speed per hour during a three-hour trip: 65 MPH, 55 MPH, 45 MPH

castortr0y [4]

Answer:

ffffgfggggggggggggg

5 0

3 years ago

The Hutters filed a joint return for 2019. They provide more than 50% of the support of Carla, Ellie, and Aaron. Carla (age 18)

sergey [27]

Answer:

Hutters can be claim two dependents

Explanation:

we know here that Hutters can be claim two dependents

because here given Carla and Ellie as Aaron meets neither the residency nor citizenship requirement

but Carla is a qualifying relative and is under the age of 24

but Ellie is above 24 but is a qualifying relative as scholarship is non-taxable

we can say that answer is two

8 0

3 years ago

Suppose French chocolate soufflé is an inferior good. When income increases and the number of producers in the market decreases

Vadim26 [7]

Answer:

d) The change to the equilibrium price of French chocolate souffle is ambiguous and the equilibrium quantity of French chocolate souffle falls

Explanation:

Inferior goods are those goods whose demand falls with the rise in the income of the consumer.

As per the given case, French chocolate souffle is an inferior good. When income of the consumer rises, his demand for French chocolate souffle will fall.

Similarly, when producers of such an inferior good decrease, the supply of French chocolate souffle shall fall.

With respect to the original equilibrium level, the demand curve shall experience a leftward shift i.e decrease whereas the supply curve too experiences a leftward shift i.e supply falls.

At the new equilibrium level, definitely the equilibrium quantity shall fall, but the change in equilibrium price cannot be ascertained as per the given information.

4 0

3 years ago

Amber Devices Ltd. has total assets worth $900 million and total liabilities worth $475 million at the end of December 31. What

natima [27]

Answer:

The current total assets of Amber devices are $900 million

IF they sell all their assets for 850 million they will have 850 million in cash. From this cash they have to pay their liabilities first, so

850 million -475 million = 375 million

The book value of the liabilities was 475 million and because Amber devices pays of all its outstanding debt at book value, the remaining cash left for the stock holders is 375 million

The stock holder receive $375 million after liquidation of assets and payment of debt.

Explanation:

6 0

3 years ago

Aztic Inc., a manufacturer of sports goods, plans to expand its operations to various other countries. During market research, i

RSB [31]

Answer: demographic makeup

Explanation: Demographics is a population analysis based on criteria like age, ethnicity, and gender. Demographic data relates to systematically articulated social economic-economic statistics, including jobs, schooling, wages, marriage rates, rates of births and deaths, and much more.

Governments, companies, and NGOs use surveys to learn much more about the dynamics of a community for many reasons, including policy development and research on the economic market. Demographic information is collected to create a profile for the client base of the company for company's marketing objectives.

Thus, from the above we can conclude that the given case depicts demographic makeup.

8 0

3 years ago