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Sloan [31]
3 years ago
10

The Federal Reserve can: A. simultaneously set any money supply and any nominal interest rate target. B. set the target money su

pply and target nominal interest rate independently. C. only set a money supply target that is consistent with the target nominal interest rate. D. only target the money supply, not the nominal interest rate.
Business
1 answer:
adell [148]3 years ago
4 0

Answer:

The answer is C.

Explanation:

The Federal Reserve acts as the Central Bank. And the tool it uses to control the economy is monetary policy and its tools are:

1. Reserve requirements

2. Open market operation

3. Discount rate(interest rate)

The Federal reserve can control the money supply in the eco economy through any of these tools.

For example, if Federal reserve wants to increase the money supply, they can do the following:

a) reducing the interest rate it lends commercial banks money, commercial banks too reduces the interest it charges businesses or households. With lower interest, households and businesses are encouraged to borrow, thereby increasing the money supply and vice-versa.

b) lowering the reserve requirements. Reserve requirement is the minimum balance commercial banks must have with the federal reserves. This is guided by law. Lowering the reserve requirements enable commercial banks to have more money to lend to their customers and vice-versa.

In all, Federal reserve use any of these tools to control money supply that is consistent with their target nominal interest rate.

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What is the maximum amount that OSHA can impose as as penalty on an employer for each willful violation
mixas84 [53]
For each willful violation $129,336 per violation
8 0
3 years ago
Why do interest rates follow the business cycle?During a recession, the demand for goods and services is lower, businesses borro
MArishka [77]

Answer:

The correct answer is letter "C": Interest rates tend rise during economic expansion and decline during recessions.

Explanation:

The expansion is the period of the economy that represents grow. Because of the prosperity atmosphere, people and businessmen request loans frequently pushing central banks and governmental entities to raise the interest rates to slow down the economy to prevent a recession. The recession itself is the period where the economy is contracted or reduced. In this case, the central banks and governmental entities decrease the interest rates to stimuli economy through loans and purchases.

6 0
3 years ago
Solving for dominant strategies and the Nash equilibrium Suppose Nick and Rosa are playing a game in which both must simultaneou
slava [35]

Answer:

The only dominant strategy in this game is for <u>NICK</u> to choose <u>RIGHT</u>. The outcome reflecting the unique Nash equilibrium in this game is as follows: Nick chooses <u>RIGHT</u> and Rosa chooses <u>RIGHT</u>.

Explanation:

                                                  ROSA

                                     left                          right

                                    4 /                            6 /

                left                  3                              4

NICK                                                      

               right             6 /                             7 /

                                       7                               6

Rosa does not have a dominant strategy since both expected payoffs are equal:

  • if she chooses left, her expected payoff = 3 + 7 = 10
  • if she chooses right, her expected payoff = 4 + 6 = 10

Nick has a dominant strategy, if he chooses right, his expected payoff will be higher:

  • if he chooses left, his expected payoff = 4 +6 = 10
  • if he chooses right, his expected payoff = 6 + 7 = 13

The only possible Nash equilibrium exists if both Rosa and Nick choose right, so that their strategies are the same, resulting in Rosa earning 6 and Nick 7.

8 0
3 years ago
What is the target percent change for
SIZIF [17.4K]
B.) 2-3% growth per period I think
6 0
3 years ago
Ben invested $20,000 into a money market account and took out $5,000 at the end of year 5. He found out at the end of 10 years t
Crazy boy [7]

Answer:

r = 11.5%

Explanation:

Given data:

invested amount $20,000

withrawl amount after 5 year is $5000

Amount at the end of 10th yr is $50,000

present value  is given as

PV =\frac{ A}{(1 + r)^n}

where

A - amount after given n year

PV = \frac{5000}{(1 + r)^5} + \frac{50000}{(1 + r)^{10}}

20,000 =  \frac{5000}{(1 + r)^5} + \frac{50000}{(1 + r)^{10}}

 Let (1 + r)^5 = t

squaring on both side

(1 + r)^{10} = t^2

20,000 =  \frac{5000}{t} + \frac{50000}{t^2}

20 = \frac{5}{t} + \frac{50}{t^2}

20 t^2 - 5t - 50 = 0

solving for t we get

t = 1.711

so, r = 1.711^{1/5} -1 = 0.115 = 11.5\%

5 0
3 years ago
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