If a bank had to hold $500,000 in reserves along with its $10 million in deposits, the minimum reserve ratio would be 1/20, or 5%.
The reserve ratio is the percentage of reservable liabilities that commercial banks are required to hold in reserve rather than lend out or invest. This standard is established by the nation's central bank, in this instance the Federal Reserve in the United States. It is also referred to as the cash reserve ratio. If the statutory reserve ratio is 10%, banks are obligated to hold 10% of their deposits in appropriate reserves. Deposits of $20 million necessitate the retention of $2 million in reserves ($20 million multiplied by ten). Excess reserves are those that are held in addition to the minimum required.To know more about ratio here
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a performance measure that is often used to evaluate the expected outcome of a project or compare different projects. is the meaning of?
A performance measure is often used to evaluate the expected outcome of a project or compare different projects. is the meaning of ROI.
ROI on costs is a ratio between net income and investment. An excessive ROI means the investment's profits evaluate favorably to its cost. As an overall performance measure, ROI is used to evaluate the performance of an investment or to compare the efficiencies of numerous exceptional investments.
Return on investment (ROI) A calculation of the monetary price of an investment as opposed to its value. The ROI method is (earnings minus value) / value.return on funding (ROI) is an approximate measure of an investment's profitability. ROI is calculated with the aid of subtracting the initial value of the funding from its very last value, then dividing this new wide variety by using the price of the investment, and subsequently, multiplying it with the aid of one hundred.
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Which of the following choices best reflects the interrelationships of the four categories of balanced Scorecard performance measures? A) Learning and growth Customer Internal business process Financial
B) Learning and growth Internal business process Financial Customer
C) Financial Learning and growth Internal business process Customer D) Learning and growth Internal business process Customer Financial Multiple choice
A. Choice B B. Choice D C. Choice C D. Choice A
The choices best reflect the interrelationships of the four categories of balanced Scorecard performance measures is A) Learning and growth Customer Internal business process Financial.
Scorecards provide management with precious insight into their company's provider and pleasant in addition to its economic track record. via measuring all of those metrics, executives are capable of educating employees and different stakeholders and offering them steering and guidance.
An employee scorecard is a management tool used to monitor a worker's performance. it's the right organizational device as it lets individuals devise, prioritize, and enforce required initiatives. It outlines every person's role and contribution to the workplace.
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porter's diamond framework to explain national competitive advantage includes four interrelated factors: demand conditions, competitive intensity in a focal industry, related and supporting industries/complementors, and .
Porter's diamond framework to explain national competitive advantage includes four interrelated factors: demand conditions, competitive intensity in a focal industry, related and supporting industries/complementors, and factor condition.
Porter Diamond refers to an economic model that helps you understand what gives one group, organization, or country a competitive advantage over another. Also known as the Porter Diamond of National Advantage theory, this theory was developed by Michael Porter in 1990 and states that certain industries in certain countries are internationally competitive and others are not.
Porter's Diamond Theory states that the success of a particular industry depends on other related industries. Supporting industries can strengthen an organization's market position and create a competitive advantage through its chain of supply, the exchange of ideas and resources.
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Why is it important to understand the amount of setup time required for each order?
Production capacity is limited because setup time cuts into available production time.
What is Setup Time Reduction?A method of minimizing the time required to switch a process from the final component for the outgoing product to the first functional component for the incoming product. The length of time it takes to finish a setup has an impact on manufacturing since it affects how adaptable a production process is determined.
Setup period, Setup time Reduction is the amount of time between the final successful run and the start of the succeeding run. Activities during setup time do not add value to the product value. Cutting down on setup time will increase a company's capacity, manufacturing flexibility, and overall output.
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if the economy is at point c and the price level increases by 100, then the real balances, interest-rate, and foreign purchases effects will .
If the price level rises by 100 and the economy is at point C, the effects of real balances, interest rates, and foreign purchases will cause the economy to shift to point A.
What exactly are foreign purchases?In order to buy commodities from abroad that have a comparative advantage over domestic products, foreign bidders are solicited. The goods acquired through foreign procurement methods constantly fluctuate as a result of the government's altering requirements.
The import trends have changed from low-tech goods that are hard to source in Korea to high-tech goods as a result of steady economic expansion and a more complicated industrial structure.
The continued expansion of the Korean economy is predicted to increase imports, which will undoubtedly raise foreign spending in the public sector. PPS is working to compile all the information needed for purchasing items from abroad into a database.
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Which one of the following stocks is correctly priced if the risk-free rate of return is 3.4 percent and the market risk premium is 7.9 percent? Stock Beta Expected Return .A. 85 85.0%B 1.50 15.25 C 1.31 11.25 D 1.23 . 11.77E 95 8.65
B 1.50 15.25
1.50 15.25 is correctly priced if the risk-free rate of return is 3.4 percent and the market risk premium is 7.9 percent.
In economics, a marketplace is a composition of structures, establishments, processes, social family members or infrastructures wherein parties have interaction in trade. even as parties may additionally trade goods and services by using barter, most markets depend upon dealers imparting their items or offerings (such as labour power) to shoppers in change for cash. it may be stated that a marketplace is the system by means of which the prices of goods and services are installed. Markets facilitate exchange and enable the distribution and allocation of assets in a society.
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Suppose two countries A and B choose the quantity of oil to produce simultaneously and without consulting with one another. B Q = 10 Q = 20 A: 1,250 A: 800 Q = 10 B: 1,250 B: 1,600 A A: 1,600 A: 1,100 Q = 20 B: 800 B: 1,100 What is each country's dominant strategy? Each country's dominant stratesy is to produce 20 A's dominant strateey is to produce 10 and Os dominant strategy is to produce 20 A's dominant strategy is to produce 20 and 's dominant strateey is to produce 10 Dambo
When two countries choose the quantity of oil to produce simultaneously and without consulting with one another then each country's dominant strategy is to produce 20. So, option A. correct.
What does dominant strategy economics mean?A dominating strategy is an optimum answer to all other strategies. A Nash equilibrium exists when players respond optimally to one another. Those that dominate their market do something that others do not: they reduce their market share in order to increase their profit. By being the highest valuable supplier in your market segment, you may bypass the competition and build a micro-monopoly.
Country A's When B selects 10, A selects 20 since it provides a greater reward of 1600. When B selects 20, A selects 10 since it provides a bigger reward of 1100. Because A picks 20 in both circumstances, the dominating strategy is 20. Country B's When A selects 10, B selects 20 since it provides a bigger reward of 1600. When A selects 20, B selects 10 since it provides a bigger reward of 1100. In both situations, B selects 20, hence the prevailing strategy is 20. Because both A and B have a dominating strategy of 20, (Option A) is the correct answer while (B, C, and D) are incorrect.
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Labor unions obtain higher wages for their members by reducing the profits of the business owners in the short run and in the long run. a. Trueb. False
The statement is False. Labor unions obtain higher wages for their members by reducing the profits of the business owners in the short run and in the long run.
Becoming a member of together in union permits workers to negotiate for better wages and benefits and improve conditions on the place of their job. There are thousands and thousands of union participants in America from all walks of life.
A hard Labor union is a business enterprise formed by means of employees which will negotiate for higher people's rights, including better pay, more secure running conditions, and higher blessings. A labor union chooses representatives to negotiate on its behalf with the company.
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Ratios merely direct an analyst to potential areas of concern and it does not provide conclusive evidence as to the existence of a problem.a. Trueb. False
Ratios merely direct an analyst to potential areas of concern and it does not provide conclusive evidence as to the existence of a problem. This statement is true.
What serves as the primary goal of ratio analysis?In order to get insights into profitability, liquidity, operational effectiveness, and solvency, ratio analysis examines line-item data from a company's financial statements. Ratio analysis allows you to compare one firm to another within the same industry or sector and track how one company has changed over time.
A thorough ratio analysis can reveal patterns and help one identify problematic metrics. Such an examination won't, however, offer concrete proof that there is a problem.
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Which of the following should an organization consider when making make/buy/rent decisions for a given software system?
An organization should consider the following when making make/buy/rent decisions for a given software system:
Competitive advantage, Legal and compliance, Skills, expertise, and labor, Time, CostWhat are the factors to be considered when making buy/rent decisions?The factors that bodies or companies or even supervisors should consider when making a rent, or buy decision include the following:
competitive advantage, security, legal and compliance issues, the organization's skill and available labor, cost, time, and vendor issues.Therefore, the correct answer is as given above
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Cattle Ranch Inc. is a for-profit corporation that is owned by six shareholders who are members of the same family. Cattle Ranch is
a. S corporation
b. benefit corporation
c. close corporation
d. a public corporation and a private corporation
Cattle Ranch Inc. is a for-profit corporation that is owned by six shareholders who are members of the same family. Cattle Ranch is
a corporation.
Cattle Ranch Inc.
The Cattle Ranch is an economic building available to Malians beginning in the Feudal Age in the Age of Empires IV. It can garrison up to three cattle and produces 28 food per minute per cattle garrisoned. Another factor might be that affluent persons who own cattle ranches have a lot of say in who gets elected as a government leader. This explains why the government provides incentives and permits ranchers to utilize their cattle ranches as tax shelters.
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subject records management is an alphabetic system of storing and retrieving records by their geographic location.
Subject Record Management is an alphabetical system for storing and retrieving records by subject or subject. Used to keep related records together under a specific topic category.
1. Records should be grouped by topic, topic, or project for administrative decisions, and users can request information by topic, topic, or project. In this situation, distributing records throughout the system of records by business name, personal name, or another identifier is not effective for retrieval. 2. Documents may not be submitted pursuant to
Other Submission Characteristics.
Both arrangements are alphabetical arrangements of subjects or titles. The arrangement of the Dictionary is that all topics are arranged alphabetically after the primary guide from A to Z. In the encyclopedic arrangement, majors are arranged alphabetically, and subdivisions of majors are arranged alphabetically after the major main guides.
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micro tek inc. is considering an investment in new equipment that will be used to manufacture a smartphone. the phone is expected to generate additional annual sales of 4,000 units at $450 per unit. the equipment has a cost of $940,000, residual value of $20,000, and an eight-year life. the equipment can only be used to manufacture the phone. the cost to manufacture the phone follows:
The machinery can only be used to make phones. the phone's manufacturing cost increased by 155%
Which exactly is an opportunity to invest?
What it means to invest is to make a current financial commitment in the hopes of future growth. The use of capital—such as time, money, effort, etc.—with the hope of receiving a return higher than the initial investment is known as investing.
How do novice investors make purchases?
Depositing funds into an internet interest bearing account, which can later be used to purchase shares of stock in share collective investment schemes, is one of the greatest ways for novice investors to learn how to invest in stocks. You may frequently open a brokerage account and begin investing for the cost of one share.
Briefing:
Annual operating income = Sales - Manufacturing cost
= (4,000 × $450) - (4,000 × $264)
= $744,000
Average investment = (Initial cost + Residual value) ÷ 2
= ($940,000 + $20,000) ÷ 2
= $480,000
Average rate of return = Average annual operating income ÷ Average investment
= $744,000 ÷ $480,000
= 155%
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The Journal entry to update the accounts for prepaid insurance that has expired is which of the following types of adjusting entries?
a. Prepaid item
b. Unearned Revenue
c. Accrued Expenses
d. Accrued Revenue
e. Not an adjusting entry
The Journal entry to update the accounts for prepaid insurance that has expired is prepaid item type of adjusting entries.
Prepaid insurance is a type of insurance that is paid for in advance. This type of insurance can be used to cover a wide range of risks, including health, life, and property insurance.
Prepaid insurance can be a great way to budget for future risks and protect yourself and your family from financial hardship in the event of an unexpected loss. Prepaid insurance accounts are insurance in which the policyholder pays for coverage in advance. This type of insurance can be beneficial for both the policyholder and the insurer.
Hence, the correct option is "A".
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The Soviet domination over the Eastern European economies was so rigid that, by the end of the 1970s, the Eastern Europeans did over 90 percent of their business with the USSR.a. True
b. False
This assertion is False because the Soviet monopoly over the economies of Eastern Europe was so severe that, by the end of the 1970s, over 90% of their trade was with the USSR.
What is the best definition of economies?A community's resource allocation is ultimately determined by a collection of connected production and utilization collectively referred to as an economy. The demands of persons who live there and conduct business there are met by the production & consumption of products and services in their entirety. An economy is indeed a region where products and services are produced, distributed, traded, and consumed. It is generally understood to be a social domain which places an emphasis on the behaviors, discourses, and tangible manifestations connected to the creation, utilization, and management of finite resources.
What is the importance of economies?Economics attempts to address the issue of scarcity, which arises when consumer demands for products and services outweigh the supply. The division of labor in the modern economy allows people to make money by specializing in what they create, which they then use to buy the goods they need or want.
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The financial statements of Danielle Manufacturing Company report net sales of $600,000 and accounts receivable of $60,000 and $90,000 at the beginning and end of the year, respectively. What is the receivables turnover ratio for Danielle? 4 times 6.67 times 8 times 10 times
The financial statements of Danielle Manufacturing Company report net sales of $600,000 and accounts receivable of $60,000 and $90,000 respectively. Danielle's receivables turnover ratio is 8 times.
Receivable turnover ratio = Turnover / Average account receivables
= $600,000 / [($60000 + $90000) / 2]
= 8 times
What is receivable's turnover ratio?
The efficiency with which a business is able to collect on its receivables or the credit it gives to clients is measured by the receivable's turnover ratio. The ratio also counts the number of times a company's receivables are turned into cash over a specific time period.
What Is a Good Turnover Ratio for Accounts Receivable?
In general, a greater number is preferable. It indicates that your clients are paying on time and that your business is proficient at collecting.
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Modified retrospective application for a change in accounting principle requires that the new standard is applied to the adoption period and ____.
Modified retrospective application for a exchange in accounting precept requires that the new preferred is utilized to the adoption length and: an adjustment is made to retained income at the establishing of the adoption period
What is retrospective application?Retrospective application capacity adjusting the opening stability of every affected factor of equity for the earliest prior length and the different comparative amounts disclosed for each prior duration as if the new accounting coverage had constantly been applied.
The modified retrospective strategy is an approximation to retrospective application, with prescribed changes to address some of the challenges of retrospective application.
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https://brainly.com/question/29442655#SPJ4Which of the following FHA insurance programs allows a borrower to purchase a home having deficiencies that prevent it from being financed with a standard home loan and provides money to complete repairs or enhancements once the property is acquired? O conventional mortgage O loan Section 203 mortgage loan O VA Mortgage loan O UFMIP mortgage loan
From the FHA insurance programs allows a borrower to purchase a home having deficiencies that prevent it from being financed with a standard home loan and provides money to complete repairs or enhancements once the property is acquired it was Section 203 mortgage loan. The correct option is (B).
What do you mean by the mortgage loan?A mortgage loan is a secured loan that enables you to access money by giving the lender collateral in the form of an immovable asset, like a home or commercial property. Until you pay back the loan, the lender retains the asset.
The biggest benefit of a mortgage loan is that, unlike most other loans, you can obtain one with very cheap interest rates and without having to leave your property ownership to anybody else.
Homebuyers and homeowners can finance the cost of both the purchase (or refinancing) of a home and the cost of its renovation with a single mortgage or they can finance the renovation of their current home using Section 203(k) insurance.
Therefore, according to the situation the Section 203 mortgage loan was applied in the give condition.
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the control system that addresses the assumptions that form the foundation of the organization is ____ control.
The control system that addresses the assumptions that form the foundation of the organization is informational control.
Informational controls: what are they?Information control, in its broadest sense, refers to a system where the control activities are implicit and indirect and the information provided to the controlled object takes the shape of an informative picture that it uses to formulate an ostensibly independent line of activity.
What advantages does information control offer?Improved efficiency – appropriate information at the appropriate time. Better performance and effectiveness thanks to appropriate knowledge and timing. persistent responsiveness and rivalry. increased innovation and creativity.
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glover owns a candy store and a jewelry store. Both businesses are operated in a mall. She also owns a restaurant across the street and a book store several blocks away. Which of the following statements is true?a.All four businesses can be treated as a single activity if Gloria elects to do so.b.All four businesses must be treated as separate activities.c.The candy store, jewelry store, and book store can be treated as a single activity, and the restaurant must be treated as a separate activity.d.The candy store, jewelry store, and restaurant can be treated as a single activity, and the book store must be treated as a separate activity.e.The candy store and jewelry store can be treated as a single activity; the restaurant must be treated as a separate activity, and the book store must be treated as a separate activity.Answer: a
The answer is option a which is that all four businesses can be treated as a single activity if Gloria elects to do so.
What elements make up a business?A business is an organization or enterprising body that carries out commercial, industrial, or professional activity. Businesses can be either for-profit corporations or nonprofit institutions. Partnerships, corporations, limited liability companies, and sole proprietorships are some of the several company structures.
Why is a business there?A company's goal is to provide customers with something valuable, which they subsequently trade for cash or other kinds of payment. The compensation must, at a minimum, pay for the owner's necessary living expenditures as well as business operational costs.
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Autonomous consumption is consumption that:
a. Varies directly with disposable income.
b. Varies inversely with disposable income.
c. Is independent of the level of disposable income.
d. Is constant at first and then varies with disposable income.
Answer: Is independent of the level of disposable income.
Explanation:
Definition of Autonomous consumption:
Autonomous consumption can be defined as "The expenditures that consumers must make even when they have no disposable income."
More precisely,
1. Autonomous consumption is defined as the expenditures that consumers must make even when they have no disposable income.
2. These expenses cannot be eliminated, regardless of limited personal income, and are deemed autonomous or independent as a result.
3. When a consumer is low on resources, paying for their necessities can force them to borrow or access money that they had previously been saving.
hence, option c is the correct option.
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in principle, the large stock of reserves outstanding should result in the fed funds rate equaling the interest on excess reserves (ioer)
The large stock of reserves outstanding should result in the fed funds rate equaling the interest on excess reserves if the commercial banks will be indifferent between the two options.
When the Federal Funds Rate is higher than the Reserves Rate banks seek to increase their return on funds by withdrawing funds from reserve accounts at the Federal Reserve and lending those funds on the Federal Funds Market.
When the Federal Reserve raises interest rates the market price of existing bonds immediately falls. New bonds will soon hit the market, offering higher interest payments to investors. Paying interest on bank reserve balances is a common monetary policy tool available to major central banks.
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Suppose that B2B, Inc. has a capital structure of 35 percent equity, 16 percent preferred stock, and 49 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 14.0 percent, 10.0 percent, and 9.0 percent, respectively.
What is B2B’s WACC if the firm faces an average tax rate of 21 percent and can make full use of the interest tax shield?
Answer:
Cost of debt after tax = (9)(1 – tax rate)
= (9) (1 –0.21)
= 7.11%
WACC = Respective cost x Respective weight
= (0.35)(14) + (0.16)(10) +(0.49)(7.11)
= 9.9839%
= 9.98% (Approx.)
Explanation: Referred to the solution above
A competitive action can be one of two types, either __________ or __________.
Answer:
strategic, tactical
Explanation:
A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the a. legal capital is $2,780,000.
b. number of shares issued is 80,000.
c. number of shares outstanding is 2,780,000.
d. average price per share issued is $3.48.
Number of shares issued is 80,000.
What is shares issued?
Shares of a corporation that have been allocated and are now held by shareholders are referred to as issued shares in the fields of finance and law. Issuance refers to the process of creating new issued shares. Simply put, allocation refers to the transfer of shares to a subscriber.
In the question, the common stock par value and the total amount is given. Moreover, paid-in capital is also given.
So, if we compute it, then it gives the number of shares issued because it contains a formula which is shown below:
Number of shares issued = (Common stock ÷ Par value)
= ($80,000 ÷ $1)
= 80,000 shares
So, paid-in capital is not relevant in the computation part, and therefore, the other options are wrong except b. option.
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what is the swot of bench
Benchmarking, also known as dashboarding or scorecarding, is a monitoring mechanism for assessing advancement in the mission-critical areas determined by the SWOT analysis. The S.W.O.T. of bench analysis are given below:
What is the swot of bench?They are:
STRENGTHS
A strong sense of brand identity.Products are reasonably priced and of high quality.Specifically meet the demands of the target market.Strategic places are chosen for stores to be.Influential domestic and international backers.WEAKNESS
Products don't appeal to the market of higher social classes.has a few media advertisements, mostly on radio and TV.OPPORTUNITIES
bigger market shares in the followingCreate new items and enhance existing ones to target the market of upper class consumers.Boost your presence and internet presence. Expand your international business.Boost brand recognition and advertise in different media.Threats
Competitors also sell goods of the same caliber for less money.Keeping products current with the newest fashions.the price of increased marketing and advertising.Learn more about S.W.O.T. from
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calculate the amount of budgeted selling and administrative expenses for february. xing, inc. has prepared the operating budget for the first quarter of the yeqra. The company forecast sales of 40000 in january, 50000 in february, and 60000 in march. variable and fixed expenses are as follows
The amount Xing, Inc. budgeted for selling and administrative expenses for February is C. $35,700.
What are the selling and administrative expenses?The selling and administrative expenses include all the variable and fixed costs incurred for the following:
SalariesRentDepreciationPower costMiscellaneous expenses.To determine the total selling and administrative expenses, we first determine the total fixed costs per month and the variable costs.
The variable costs are a function of the budgeted sales for each month since a percentage of the sales have been identified as variable costs for power costs and miscellaneous expenses.
January February March
Budgeted sales $40,000 $50,000 $60,000
Variable costs:
Power cost $12,000 $15,000 $18,000
Miscellaneous 2,000 2,500 3,000
Total variable cost $14,000 $17,500 $21,000
Total fixed expenses per month = $18,200
Selling and administrative expenses for February = $35,700 ($17,500 + $18,200).
Thus, for February, Xing forecast to spend C. $35,700 on sales and administration, which may be more or less than the actual expenses for the month.
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Question Completion:Variable and fixed expenses are as follows:
Variable Expenses: Power cost (30% of sales)
Miscellaneous expenses: (5% of sales)
Fixed Expenses:
Salaries expense: $10,000 per month
Rent expense: $5,000 per month
Depreciation expense: $1,400 per month
Power cost/fixed portion: $800 per month
Miscellaneous expenses/fixed portion: $1,000 per month
Using the information above, calculate the amount of selling and administrative expenses for the month of February.
A. $32,200
B. $32,200
C. $35,700
D. $14,000
The more predictable policy decisions by the Federal Reserve are, the more effective they are in the long run.
For Long-term effectiveness of Federal Reserve policy decisions increases with predictability. The said statement is true.
What is Federal Reserve policy?The Federal Reserve core functions and communications to promote maximum employment, stable prices, and moderate long-term interest rates as the primary economic objectives which the Federal Bank to pursue & combining into the monetary policy in the United States. These monetary policies are known as Federal Reserve Policy.
The central bank regulates the credit flow in the economy and monitor the commercial banks lending terms & conditions.
Open market operations, the discount rate, and reserve requirements are all within the Federal Reserve's jurisdiction.
Thus very helpful in long run obejctive.
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you are a pessimist and you model the state of the economy to be twice as likely to be bad as it is to be good.
Pessimism has an impact on the macroeconomy by causing families to reduce their current demand and businesses to post fewer job openings. Additionally, businesses have less motivation to drop prices despite declining consumer demand because of the concern of rising future expenses.
What is Pessimism?Pessimism is a negative mental attitude in which a negative result from a certain scenario is predicted. Pessimists frequently concentrate on the drawbacks of life in general. Pessimism has an impact on the macroeconomy by causing families to reduce their current demand and businesses to post fewer job openings. Additionally, businesses have less motivation to drop prices despite declining consumer demand because of the concern of rising future expenses. Being pessimistic refers to the tendency to anticipate or see the worst-case scenarios. A pessimist is someone who is frequently perceived as lacking in hope and joy and who exhibits doubt or distrust. Essentially, being pessimistic entails anticipating the worst in every circumstance.
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If investment increases by $15 billion and the economy’s MPC is 0.8 the aggregate demand curve will shift A.Leftward by $75 billion at school price level B .Leftward by $30 billion at each price level C. Rightward by $15 billion at each price level D. Rightward by $75 billion at each price level
B. Aggregate demand curve to shift leftward by $30 billion at each price level.
Aggregate demand curveThe entire amount of goods and services produced in the economy over time is represented by the aggregate demand curve. The relationship between the overall and the general level of pricing in the economy is depicted by the aggregate demand curve.
The aggregate demand curve will shift leftward when investment increases, as this will lead to a decrease in consumer spending. The amount of the shift is determined by the MPC, which in this case is 0.8. This means that for every $1 increase in investment, there will be an $0.80 decrease in consumer spending. Therefore, a $15 billion increase in investment will lead to a decrease in consumer spending of $12 billion ($15 billion x 0.8). This will cause the aggregate demand curve to shift leftward by $30 billion at each price level.
Given,
MPC = 0.8
The shift in the Aggregate Demand curve is equal to the increase in investment multiplied by the MPC.
Thus, the shift in the Aggregate Demand curve
= $15 billion × 0.8 = $12 billion
At each price level, the shift in the Aggregate Demand curve is equal to the shift in the Aggregate Demand curve multiplied by the price level.
Thus, the shift in the Aggregate Demand curve at each price level
= $12 billion × Price Level
Therefore, the shift in the Aggregate Demand curve at each price level
= $30 billion.
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