BUSINESS COLLEGE

To decrease the money supply, the Federal Reserve could a. decrease the required reserve ratio. b. conduct an open market purchase of U.S. Treasury securities. c. increase the discount rate. d. forbid the reselling of U.S. Treasury securities.

Answers

Answer 1
Answer:

Answer: c. increase the discount rate.

Explanation:

The discount rate of a country is the rate at which the central bank in that country loans money out to the financial institutions.

When this rate is low, more financial institutions will borrow money as opposed to when it is high. Banks borrowing money increases the money supply in the economy so if the Federal Reserve wants to reduce money supply, it should increase the discount rate which would dissuade banks from borrowing from the Fed thereby limiting money supply.

Related Questions

Stanford issues bonds dated January 1, 2019, with a par value of $248,000. The bonds’ annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $229,1151. What is the amount of the discount on these bonds at issuance?2. How much total bond interest expense will be recognized over the life of these bonds?3. Prepare an effective interest amortization table for these bonds.
Everything else the same, the higher the expected rate of inflation, _____. a. the lower the loss in purchasing power of investors b. the higher the required rate of return on an investment c. the lower the maturity premium required by the investors d. the higher the money supply in the economy e. the lower the tax rate in the economy
David and Lilly Fernandez have determined their tax liability on their joint tax return to be $1,700. They have made prepayments of $1,500 and also have a child tax credit of $2,000, of which $1,400 is refundable.What is the amount of their tax refund or taxes due?
Research shows that projects dedicated to information security policies fail due to eight common perceived missteps. Which of the following is not one of the missteps?
a. Unclear purpose: This refers to the clarity of value the project brings.b. Doubt: This refers to the need for change; it is necessary to explain why what is in place today is not good enough.c. Lack of organizational incentives: This refers to the inability to motivate behaviorsd. Lack of complexity: This refers to an oversimplication of policies that sacrifices depth and nuance.
Divine Apparel has 2,600 shares of common stock outstanding. On October 1, the company declares a $0.25 per share dividend to stockholders of record on October 15. The dividend is paid on October 31. Record all transactions on the appropriate dates for cash dividends.

In the 1990s thousands of "dot-com" companies emerged with great fanfare to take advantage of the Internet and new information technologies. A few, like Google, eBay, and Amazon, have generally thrived and prospered, but many others struggled and eventually failed. Explain these varied outcomes in terms of how the market system answers the question "What goods and services will be produced?"

Answers

Answer:

Check the explanation

Explanation:

Yahoo, eBay, and Amazon amid others companies that succeeded offered a large variety of  goods and services, but the factor that differentiated them apart is the methods and creative technique the used in facilitating and fastracking the process of  shopping  these items.  

When a shopper weighs the benefits alongside the costs,  they will most of the time decide to shop on one of these eCommerce sites since the cost is so low, there are a lot of options available to shoppers, and they don’t need to check out numerous stores to find the precise  product they want they want to buy.

Dimitrov Corporation, a company that produces and sells a single product, has provided its contribution format income statement for July.Sales (6,800 units) $401,200
Variable expenses 265,200

Contribution margin 136,000
Fixed expenses 103,500
Net operating income $32,500



If the company sells 6,700 units, its net operating income should be closest to:

a. $31,979
b. $32,500
c. $28,000
d. $30,500

Answers

Answer:

Option (d) is correct.

Explanation:

Contribution margin per unit:

= Contribution margin ÷ No. of units sold

= 136,000 ÷ 6,800

= $20 per unit

If the company sells 6,700 units, then

Net operating income:

= Contribution margin - Fixed expenses

= (6,700 units × $20 per unit) - $103,500

= $134,000 - $103,500

= $30,500

Therefore, the net operating income of this company is closest to $30,500.

The risk-free rate is 4.2%, and the expected return on the market is 10%. A publicly-traded bond promises to return 8%. The expected return on the bond investment is 5.5%. What is the bond's implied beta?a) 0.45
b) 0.22
c) 0.73
d) 1.38

Answers

Answer: the bond's implied beta= 0.22-b

Explanation:

According to Capital Asset Pricing Model CAPM, we have that  

Expected return =Rf + β(Rm - Rf)

Rm is expected return on market

β= beta of bond

Rf=risk free return

therefore

Expected return =Rf + β(Rm - Rf)

5.5 = 4.2 +  β(10-4.2)

5.5=4.2+ β5.8

5.5-4.2= β5.8

1.3=β5.8

β= 1.3/5.8=0.22

Which of the following best describes why the predicted incremental earnings arising from a given decision are not sufficient in and of themselves to determine whether that decision is worthwhile? A) They do not show how the firm's earnings are expected to change as the result of a particular decision.
B) They are not easily predicted from historical financial statements of a firm and its competitors.
C) These earnings are not actual cash flows.
D) They do not tell how the decision affects the firm's reported profits from an accounting perspective.

Answers

Answer and Explanation:

C) These earnings are not actual cash flows.  

The manufacturing overhead budget at Rost Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Answers

Answer:

Total overhead cash disbursement= $59,080

Explanation:

Giving the following information:

Estimated direct labor hours= 2,800

The variable overhead rate is $7.00 per direct labor-hour.

Estimated fixed manufacturing overhead= $43,120 per month

Includes depreciation of $3,640

To calculate the cash disbursement, we need to deduct from the fixed manufacturing overhead the depreciation expense because it is not a cash disbursement.

Variable overhead= 7*2,800= 19,600

Fixed overhead= 43,120-3,640= 39,480

Total overhead cash disbursement= $59,080

Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure, called core inflation, Group of answer choices is more consistent with measures of inflation used in other countries.
fluctuates more than measures of inflation that include food and energy prices.
gives a better measure of ongoing, sustained price changes.
provides a real, rather than a nominal, rate of inflation.

Answers

Answer:

gives a better measure of ongoing, sustained price changes.

Explanation:

  • In order to measure the market-based rate of inflation that excludes the food and the energy processes are preferred by some economist as the core inflation that is long price trend and is frequent subject to the change as food and energy. As this index is based on the dynamic consumption basket the economic variables are adjusted by the price defoliator.
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