Answer:
Explanation:
When Leverett's exports became less popular, its savings, Y-C-G does not change. Reason being that, it is assumed that Y depends on the amount of capital and labour, consumption depends only on disposable income and government spending is a fixed extrinsic variable.
Since investment depends on interest rate, and Leverett is a small open economy that takes the interest rate as given, thus investment also does not change . Neither does net export change (This is shown by the S-I curve in the attachment).
The decreased popularity of Leverett's exports leads to an inward shift of the net export curve inward. At the new equilibrium,net exports remains unchanged, though the currency has depreciated.
Leverett's trade balance remained the same, despite the fact that its exports are less popular, this is due to the fact that the depreciated currency provides a stimulus to net exports which overcomes the unpopularity of its exports by making them cheaper.
b. Leverett's currency now buys less foreign currency, thus traveling abroad becomes more expensive. This is an instance showing that imports (including foreign travel) have become more expensive- as required to keep net exports unchanged in the case of decreased demand for exports.
Answer:
d $250,000; subtracted from
Explanation:
Sales of U.S. Treasury bills to the banking system by the Fed is a contractionary monetary policy that will reduce the money supply.
Based on the money supply multiplier, the amount of the reduction in money can be calculated as follows:
Amount of reduction in money supply = $25,000 / 10% = $250,000.
Therefore, if the banking system does NOT want to hold any excess reserves, <u>250,000</u> will be <u>substracted from</u> the money supply.
If people refused to use banks to create checkable deposits, the banking system would not be able to create new money.
Checkable deposits include all accounts on which checks can be drawn. These deposits allow the owner of bank account to write checks to third parties. Also, they are very liquid assets that allow depositors to have an easy access to their funds.
For these reason, checkable deposits generally are important but also one of the lowest-cost source of bank funds, covering a large share of bank liabilities. Thus, banks create money by lending excess reserves to consumers and businesses.
Hence, if people refused to use banks to create checkable deposits, the money multiplier decreases.
To learn more about Checkable deposits here:
brainly.com/question/15867820
#SPJ4
Answer:
B. buyers bear most of the incidence of the tax.
Explanation:
If demand is inelastic, quantity demanded is insensitive to changes in price.
If supply is elastic, a small change in price has a great effect on quantity supplied. Quantity supplied is sensitive to changes in price.
If a tax is imposed on gasoline, the incidence (who pays for the tax) can be beqred by the consumers because they have an inelastic demand. If the price of gasoline rises , the quantity demanded doesn't change.
If the tax incidence was borne by the suppliers, the quantity supplied would drop.
I hope my answer helps you.
