Answer:
1) If the Fed sells $2 million of government bonds, the economy’s reserves Decrease by $2 million, and the money supply will Decrease by $16 million.
2) The money multiplier will remain unchanged. True
3) As a result, the overall change in the money supply will remain unchanged. True
Explanation:
1.) We have the reserve requirement for checking deposits as 12.5% with banks not holding any excess reserves.
To calculate Money Multiplier:
Money Multiplier = 
= 
= 8
If the Fed sells $2 million of bonds, reserves will decrease by $2 million and the money supply will decrease by 8 x $2 million = $16 million.
2) and 3) Now the Fed lowers the reserve requirement to 10 percent, but banks choose to hold another 2.5 percent of deposits as excess reserves.
To calculate Money Multiplier:
Money Multiplier = = 
= 8
Money multiplier is 8 same as in 1) Therefore the statements: "The money multiplier will remain unchanged" and "As a result, the overall change in the money supply will remain unchanged" are both True.
Answer:The Firm should continue to produce up until Revenue generated equals Marginal Cost. Cold Duck Company would maximize profit when the number of flights is in a level when Revenue equals Marginal cost which is the same as variable costs in this case.
Explanation:
Cold duck Airlines leases plane on a year long contract at an average cost of $600 per flight.The average cost of $600 per flight is calculated as Lease cost per year divided by number of flights. This tells us that the lease cost per year is fixed and the $600 average cost per flight is the Average Fixed cost. if Cold duck flies more planes between Tacoma and Portland The number flights will increase which will decrease the average lease cost per flight.
Other Costs fuel (flight attendants,etc) amount to $550 per flight, these costs will increase as Cold Duck Airlines increases flights between Tacoma and Portland. These costs should be treated as Variable costs because they increase as the number flights increases.
The revenue generated on each flight, which can be seen as the price for each flight is $1000.
The Firm maximizes its profits in a competitive market by producing a quantity level That makes Price equals Marginal cost, Marginal cost being the price of producing an additional unit, in this case is the cost of an additional flight which is $550 amount of other costs because lease cost fixed whether Cold Duck Makes 1 flight or 10 flights it doesnot change
The Firm should continue to produce up until Revenue generated equals Marginal Cost. Cold Duck Company would maximize profit when the number of flights is in a level when Revenue equals Marginal cost which is the same as variable costs in this case. Revenue would be equal to $550 when profit is at the maximum level
Answer:
OPTION "b" will be the correct answer.
Explanation:
From the following is the most strategic approach to take is that you could increase the chances of your current traffic choosing to convert and move down your funnel. Over time, this has the potential to drastically lower your cost to acquire a customer and positively impact your return on investment. The option "b" fulfills the demand of the situation mentioned and this will be the most significant option to be selected while suffering the situation.
Answer:
C) 2.57%
Explanation:
Pet World's net cash flows:
<u>Year </u> <u>Cash flow</u>
0 -$9,500
1 $2,000
2 $2,025
3 $2,050
4 $2,075
5 $2,100
In order to find the rate of return we can use an excel spreadsheet and the IRR function =IRR (values,[guess]) =IRR (-9500,2000,2025,2050,2075,2100)
=IRR = 2.57%
Answer: B. your Debt to Credit ratio
Explanation:
Your debt to credit ratio is important to lenders because it shows whether you spend wisely when given debt.
Debt to credit is measured as the percentage of debt you have given your credit limit. If for instance you have a credit card limit of $50,000 and have debt of $10,000, your debt to credit ratio is:
= 10,000/50,000 * 100
= 20%
Generally the lower this ratio, the better the contribution to your credit score.
