Answer:
The correct answer is Option "b. The value of the currency would increase"
Explanation:
The government through the central bank can adopt a variety of measures to control the amount of money supply in the economy. The state uses a combination of monetary and fiscal policies to this effect.
In the given example, the federal government would not print more money due to the implications it has not only on the value of the currency but also on other macroeconomic variables such as interest rates and inflation.
By printing money, there would be an excess amount of money supply in the economy. That would make each dollar in the economy worth less than what it was before. This puts downward pressure on interest rates and boosts inflation as well.
Due to higher inflation, a greater amount of money would be required to continue with normal business which would again cause the need to further increase money supply. Using the law of simple demand and supply, the value of money would keep lowering as money supply is kept increasing. This is why a government might elect to not print money.
Monetary policy is the control of the quantity of money available in an economy and the channels by which new money is supplied.
<h3>What is
Monetary policy?</h3>
The monetary authority of a country adopts monetary policy to regulate the money supply or the interest rate payable for very short-term borrowing, frequently in an effort to reduce inflation.
The central bank's macroeconomic policy is known as monetary policy. It is a demand-side economic strategy used by a nation's government to achieve macroeconomic goals like inflation, consumption, growth, and liquidity. It involves managing the money supply and interest rate.
Price stability is the main goal of monetary policy. In order to promote sustainable economic growth, the general price level in the domestic economy must remain as low and stable as possible in order to achieve the goal of price stability.
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Explanation:
I think it's $840
For markup, it's 80% which means 4/5
GP/Cost = 4/5
GP/4200 = 4/5
5×GP = 4×4200
5GP = 16800
GP = 16800÷5 = 3360
Therefore, if we less the markup from the cost, what is left is 4200-3360 = 840
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Answer:
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