1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Korolek [52]
2 years ago
15

Reserves$72Checkable Deposits$240 Securities110Loans from Federal Reserve Banks2 Loans60 Consolidated Balance Sheet: Federal Res

erve Banks Securities$240Reserves of Commercial Banks$72 Loans to Commercial Banks2Treasury Deposits30 Federal Reserve Notes140 Refer to the given balance sheets and assume the reserve ratio is 25 percent. Suppose the Federal Reserve Banks buy $2 in securities from the public, which deposits this amount into checking accounts. As a result of these transactions, the supply of money will
Business
1 answer:
mamaluj [8]2 years ago
5 0

Answer:

d. directly increase by $2 and the money-creating potential of the commercial banking system will increase by $6

Explanation:

Note: The organized table of the question is attached as picture below

Total increase in money supply = (1/Reserve ratio)*2

Total increase in money supply = (1 / 0.25) * 2

Total increase in money supply = 4 * 2

Total increase in money supply = 8.

Out of which 2 is directly increased because fed deposits 2 into checking deposits and 6 is indirectly increased.

You might be interested in
You recently bought a used car and it breaks down. You take it to the repair shop, which will charge $400. You don’t have that m
notka56 [123]

Answer:

My Guest is P2P or Debit Card

Explanation:

3 0
2 years ago
Pharoah Company was started on May 1. A summary of May transactions is presented as follows. 1. Stockholders invested $24,500 ca
hodyreva [135]

Answer:

1. Stockholders invested $24,500 cash in the business in exchange for common stock.

Dr Cash 24,500

    Cr Common stock 24,500

2. Purchased equipment for $4,500 cash.

Dr Equipment 4,500

    Cr Cash 4,500

3. Paid $200 cash for May office rent.

Dr Rent expense 200

    Cr Cash 200

4. Paid $600 cash for supplies.

Dr Supplies 600

    Cr Cash 600

5. Incurred $350 of advertising costs in the Beacon News on account.

Dr Advertising expense 350

    Cr Accounts payable 350

6. Received $4,900 in cash from customers for repair service.

Dr Cash 4,900

    Cr Service revenue 4,900

7. Declared and paid a $1,000 cash dividend.

Dr Dividends 1,000

    Cr Cash 1,000

6 0
3 years ago
The decision to take less salary in a year when the company was less profitable and employees' pay was cut is an example of Nish
ollegr [7]

Answer: commitment

Explanation:

The Chief Executive Officer of Japan Airlines, who was Haruka Nishimatsu, was an example of a strategic leader who had a high performance.

The The decision to take less salary in a year when the company was less profitable and employees' pay was cut is an example of Nishimatsu commitment to the company.

4 0
3 years ago
Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd = 9%,
solniwko [45]

Answer:

cost of common equity = 14.46%

WACC = 11.29%

accept = Project A

Explanation:

Cost of common equity is the return that is required by Holders of Common Stock.

The available details can be used to calculate the cost of common equity using the Dividend Growth Model as follows :

Cost of common equity = (Next year`s Dividend / Current Market Price of a Stock) + Expected Growth

                                        = ($2.20/$26)+6%

                                        = 14.46%

WACC is the minimum return that a project must offer before it can be accepted.It shows the risk of the company.

Cost of Debt = Market Interest Rate × (1 - tax rate)

                     = 9.00% × (1-0.40)

                     = 5.40%

Capital Source                Weight                 Cost                 Total

Debt                                   35%                  5.40%               1.89%

Common Equity                65%                 14.46%               9.40%

Total                                 100%                 19.86%              11.29%

Therefore WACC is 11.29%

When evaluating projects, Compare the Project`s Internal Rate of Return (IRR) to the WACC.

<u>Project A</u>

IRR 12% > WACC 11.29%

Therefore Accept

<u>Project B/S</u>

IRR 11% < WACC 11.29%

Therefore Do Not Accept

3 0
3 years ago
There are two people in the economy: Martha and Charlie. There are two goods in the economy: books and wine. Martha is endowed w
balu736 [363]

Answer:

Charlie consumes 100 books and 25 wines at pareto-optimal allocation, is the right answer.

Explanation:

According to the question, book is denoted with b whereas, wine is denoted with w.

The Utility function of Martha is-  U\left ( b,w \right )=6b+24w

The Utility function for Charlie is- U\left ( b,w \right )=bw

P_{b} = $1 : P_{w} = $4

At pareto-optimality,

MRS_{bw}=\frac{P_{b}}{P_{w}}\\\frac{w}{b}=\frac{1}{4}\\4w=b\\

The budget constraint,

1.b+4.w=m=1\left ( 20 \right )+4\left ( 45 \right )\\b+4w=20+180\\4w+4w=200\\w=\frac{200}{8}=25\\\therefore b=100

Therefore, it may be said that Charlie must consume 100 books and 25 wine at pareto-optimal allocation.

3 0
3 years ago
Other questions:
  • Firms issue callable bonds to give them financing flexibility in case future interest rates. True or False
    11·2 answers
  • When the bicycle manufacturer Trek determined that some consumers use bikes for green transportation whereas others use them for
    8·1 answer
  • Help me with this I do not know how to answer it
    6·2 answers
  • Carla and Ben have been married for 50 years. During that time, Carla stayed home raising their children and maintaining their h
    9·1 answer
  • The conferences were scheduled for; October 1, November 1, and December 1. The conferences were scheduled for: October 1, Novemb
    6·1 answer
  • Unlike traditional manufacturing, flexible manufacturing: a. decreases efficiency. b. lowers unit costs. c. allows the productio
    13·1 answer
  • When inflation was expected to be high and it turns out to be low, wealth is redistributed from debtors to creditors. / true or
    10·1 answer
  • The four types of consumer products differ in terms of the (1) effort the consumer spends on the decision, (2) attributes used i
    14·1 answer
  • Retailers may use online liquidators to address the problem of ________. A) distressed inventory B) shopping cart abandonment C)
    15·1 answer
  • What strategy did president roosevelt use to restore america's confidence in government and the private banking system?
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!