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3 years ago

Increasing the amount of money in the economy results in

Business

1 answer:

Elena-2011 [213]3 years ago

7 0

Answer:

By increasing the amount of money in the economy, the central bank encourages private consumption. Increasing the money supply also decreases the interest rate, which encourages lending and investment. The increase in consumption and investment leads to a higher aggregate demand.

Explanation:

It is important for policymakers to make credible announcements. If private agents (consumers and firms) believe that policymakers are committed to growing the economy, the agents will anticipate future prices to be higher than they would be otherwise. The private agents will then adjust their long-term plans accordingly, such as by taking out loans to invest in their business. But if the agents believe that the central bank’s actions are short-term, they will not alter their actions and the effect of the expansionary policy will be minimized.

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2 years ago

Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions

Veseljchak [2.6K]

Answer:

Return on Investment (ROI)

In terms of margin :

Division Osaka (ROI) = 21.00 %

Division Yokohama (ROI) = 18.75%

In terms of turnover :

Division Osaka (ROI) = 300%

Division Yokohama (ROI) = 225%

Residual Income

Division Osaka = $60,000

Division Yokohama = $120,000

Explanation:

<em>Return on Investment = Divisional Profit Contribution / Assets Employed in the Division x 100</em>

In terms of margin :

Division Osaka (ROI) = $ 210,000 / $ 1,000,000 x 100 = 21.00 %

Division Yokohama (ROI) = $ 720,000 / $ 4,000,000 x 100 = 18.75%

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Division Osaka (ROI) = $ 3,000,000 / $ 1,000,000 x 100 = 300%

Division Yokohama (ROI) = $ 9,000,000 / $ 4,000,000 x 100 = 225%

<em>Residual Income = Controllable Profit - Cost of Capital Charge on Investment Controllable by Divisional Manager</em>

Division Osaka = $ 210,000 - $ 1,000,000 x 15% = $60,000

Division Yokohama = $ 720,000 - $ 4,000,000 x 15% = $120,000

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Answer:

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Explanation:

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