Which of the following is a normative economic statement? The poverty rate hit a new high last year and income distribution also worsened. Health care accounts for roughly a third of total spending in the economy. The government needs to revamp the Social Security program to make it sustainable. Retail sales are expected to continue on their downward trend in the next three quarters.

Answer:

The statement is false.

Explanation:

As the market value of the stock depends upon the industry risk, political, economical, technological, etc factors and also largely depends upon the business performance which is the profits generated by the organization and its cashflow health. So higher par value has nothing to do with higher market value. Hence the statement is totally incorrect.

Answer:

a) the correct answer is "B"

b) the correct answer is "C"

Explanation:

a) the correct answer is "B"

relies on nominal GDP which might have increased because of price increases and not output increases. As nominal GDP accounts for the price and it is calculated at the current price level. The answer is "B".

b) the correct answer is "C"

We can ask for growth rate of real GDP which excludes price change.

Answer:

Ted is giving up an interest of 37.5 by pre-committing his money to a Christmas savings account

Explanation:

Step 1: Determine interest amount

The formula for calculating interest is as follows;

I=PRT

where;

I=interest

P=principal

R=annual interest rate

T=number of years

In our case;

P=750

R=10%=10/100=0.1

T=From June 1 to December 1=6 months=0.5 years

replacing;

I=(750×0.1×0.5)=$37.5

Step 2: Determine total amount Ted will have for the two scenarios

case 1

Christmas savings program=750

Ordinary savings account=(750+37.5)=787.5

Ted is giving up an interest of 37.5 by pre-committing his money to a Christmas savings account

Answer:

a) First Main Street Bank's T-account (before the bank makes any new loans) will look as follows:

                  Assets                         |                Liabilities                  

Reserves                   $1,800,000 |  Deposits             $1,800,000

b) The effect of a new deposit on excess and required reserves when the required reserve ratio is 25% are as follows:

Amount Deposited (Dollars) = $1,800,000

Change in Excess Reserves (Dollars) = $1,350,000

Change in Required Reserves (Dollars) = $450,000

Explanation:

a) Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans)

A deposit of $1,800,000 by Yakov into his checking account at First Main Street Bank will lead to the creation of both an asset and a liability for First Main Street Bank.

The reserves on the asset side of the T-account of First Main Street Bank will therefore increase by $1,800,000. This gives the bank the opportunity to able to give loan to its other customers from the additional reserves.

On the other hand, the deposit of $1,800,000 by Yakov will be recorded as a demand deposit on the liability side of the T-account of First Main Street Bank. This is because it is possible for Yakov to withdraw his deposit at any time.

This transaction will therefore be reflected as follows:

                  Assets                         |                Liabilities                  

Reserves                   $1,800,000 |  Deposits             $1,800,000

b) Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 25%.

Note: See the attached excel file to see how the table will actually look.

The required reserve ratio of 25% implies that First Main Street Bank is required by law to hold 25% of the new reserves which in this case is the initial deposits from Yakov.

By calculating this, 25% of $1,800,00 is $450,000 and it indicates an increase of $450,000 in the required reserve of First Main Street Bank.

After deducting 25% from 100%, we have 75% left. And 75% of $1,800,000 is $1,350,000. This $1,350,000 is the excess reserves that First Main Street Bank can use to give loans to other customers.

The breakdown is therefore as follows:

Amount Deposited (Dollars) = $1,800,000

Change in Excess Reserves (Dollars) = 75% * $1,800,000 = $1,350,000

Change in Required Reserves (Dollars) = 25% * $1,800,000 = $450,000

The reserve ratio is part of the reservable liabilities that commercial banks should hold on to, rather than lending or investing.

What is a reserve ratio?

This is a requirement determined by the country's largest bank, the United States Federal Reserve. It is also known as the cash reserve ratio.

As per the information, the  calculation of the reserve ratio from the government bond:

Now, this 1,800,000 will be part of demand deposits on the Assets side, and on the liability side, it will form part of the reserves.

               Assets                         I               Liabilities                  

Reserves                   $1,800,000 |  Deposits             $1,800,000

Secondly, the required reserve to be maintained from the reserves is $450,000 and the excess reserve is $1,350,000 that can be utilised for lending loans to the Public.

Hence, the amount of reserve ratio that First Main street Bank will maintain is $450,000.

To learn more about reserve ratio, refer:

brainly.com/question/26960248

Answer:

The correct answer is B

Explanation:

Economic theory is the theory which states or trying to explain the phenomena of economics, how the economy behaves, interpret the reason and what is the best solution to the economic problem- how to influence the economic theory.

All the theories of the economic, used to explain the particular problems or the situation in the economy through its model.

So, the good economic theory would be the one which comprise of the simplification of reality.

Answer:

This is true, the efficient market hypothesis only holds if all the investors are rational, for example if an investor is not rational and wants to make a loss instead of profit, then the efficient market hypothesis wont hold as the investor will be acting in a way that wont benefit him. When the investor acts irrationally, then he wont react correctly to the information he has and buy or sell stocks which he isn't supposed to buy or sell and this will change the price of the stock from what the price of the stock should be.

Explanation: