The supply of money increases whena. the value of money increases.b. the interest rate increases.c. the Federal Reserve purchases bonds.d. velocity increases.

Answers

Answer 1
Answer:

Final answer:

The supply of money increases when the Federal Reserve purchases bonds, as this practice results in banks having more cash, which in turn increases the money supply in the economy.

Explanation:

The supply of money increases when the Federal Reserve purchases bonds. In this scenario, banks get cash which then translates to an increased money supply in the economy. This is called an open market operation, which is one of the tools the Federal Reserve uses to influence the supply of money and ultimately interest rates. An increase in the value of money, interest rates, or velocity does not directly increase the money supply. Rather, these factors can affect the demand for money or the speed at which money circulates in an economy.

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Answer 2
Answer:

Final answer:

The supply of money increases when the Federal Reserve purchases bonds, as this inserts more money into the economy. Value increase, interest rate increase, or increased velocity do not directly increase the money supply.

Explanation:

The supply of money increases when the Federal Reserve purchases bonds. This is part of monetary policy used by the Federal Reserve to control inflation and the economy. When the Federal Reserve purchases bonds, it essentially creates money and puts it into the economy, increasing the total supply of money. This is in contrast to when the value of money increases, the interest rate increases, or the velocity (speed at which money changes hands) increases which don't directly increase the supply of money.

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Related Questions

Sunland Company issued $530,000, 15-year, 6% bonds at 96. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Suppose an industry is made up of 16 firms. Three firms each sell 12 percent of the industry's total output; another three firms each sell 8 percent; another five firms each sell 5 percent; and the last five firms each sell 3 percent. What is the eight-firm concentration ratio in this industry?
Need help in these question​
The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Department A and on machine-hours in Department B. At the beginning of the year, the Corporation made the following estimates: Department A Department B Direct labor cost $ 60,000 $ 40,000 Manufacturing overhead $ 90,000 $ 45,000 Direct labor-hours 6,000 9,000 Machine-hours 2,000 15,000 What predetermined overhead rates would be used in Department A and Department B, respectively?
Suppose the target range for the federal funds rate is 1.5 to 2 percent but that the equilibrium federal funds rate is currently 1.7 percent. Assume that the equilibrium federal funds rate falls (rises) by 1 percent for each $120 billion in repo (reverse repo) bond transactions the Fed undertakes. If the Fed wishes to raise the equilibrium federal funds rate to the top end of the target range, will it repo or reverse repo bonds to non-bank financial firms? How much will it have to repo or reverse repo?

This field of study has helped us understand differences in fundamental values, attitudes, andbehavior between people in different countries and within different organizations. a. Anthropology b. Corporate strategyc. Political science d. Operations research e. Psycholinguistics

Answers

Answer:

The correct answer is letter "A": Anthropology.

Explanation:

Anthropology is a social science in which the main objective of the study is the individual as a whole. It means, anthropology studies the human being through many focuses offered by disciplines such as natural, social, and science. Anthropology allows us to know men in his society and the culture where he belongs.

Cash 5,345 Accounts Receivable 2,662 Prepaid Expenses 725 Equipment 14,421 Accumulated Depreciation 6,970 Accounts Payable 1,643 Notes Payable 5,223 Common Stock 1,000 Retained Earnings 6,003 Dividends 664 Fees Earned 7,033 Wages Expense 2,463 Rent Expense 804 Utilities Expense 441 Depreciation Expense 234 Miscellaneous Expense 113 Totals 27,872 27,872 Determine the net income (loss) for the period.

Answers

Answer:

Net income = $8,318

Explanation:

Current asset

Cash 5,345

Accounts receivables 2,662

Prepaid expenses 725

Total 8,732

Fixed asset

Equipment 14,421

Less dep. 6,970

Balance. 7,451

Total 8,733 + 7,451 = 16,184

Current liabilities

Accounts payable 1,643

Notes payable. 5,223

Total. 6,866

Financed by

Common stock 1,000

Net Income. 8,318

Total 6,866 + 9,318 = 16,184

Which of the following is an example of the free-rider problem? a. Both Zoe and Zach receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care. b. Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income. Yet his next door neighbor, Alice, is not eligible for the free lunch. c. Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking. d. Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one, get one free sale.

Answers

Answer:

c. Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking

Explanation:

Free rider is a form of market inefficiency that occurs when people benefit from a good or service but do not pay or underpay for the product.

Betty is receiving free protection from Bruce's dog.

I hope my answer helps you

Answer:

Which of the following is an example of the free-rider problem? Option C is the most suitable answer - Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking.

Explanation:

In a situation whereby one party benefits without having to pay for the transaction themselves, and rather the other party pays for it, there would be an occurrence of the free-riding problem.

In the scenario described in the question, the neighbor is receiving benefits from burglars without having to pay for the security or dog.

Therefore, option C is the most suitable answer.

AIE Industries plans to purchase a new delivery truck for $250,000. The company has been quoted an annual rate of 6.5 percent with discount interest and a compensating balance of 2 percent.a. How much will AIE have to borrow?
b. What is the effective rate on this loan?

c. If AIE can convince the bank to remove the compensating balance requirement, what is the effective rate?

Answers

Answer:

a. AIE will have to borrow $25,5102.04  

b. The Effective Rate on this Loan is 6.63%

c. If AIE can convince the bank to remove the compensating balance requirement the  effective rate is 6.50%

Explanation:

In order to calculate how much will AIE have to borrow we would have to use the following formula:

Amount to be borrowed = Cost of Truck / (1 - Compensating balance)

Amount to be borrowed = $250000 / (1 - 0.02)

a. Amount to be borrowed = $25,5102.04

In order to calculate the effective rate on this loan we calculate the following:

Effective Rate on this Loan = Interest / Amount received

Effective Rate on this Loan = 16581.63 / 250000

b.  Effective Rate on this Loan = 6.63%

c. If AIE can convince the bank to remove the compensating balance requirement the Effective rate = annual rate, hence the effective rate is 6.50%

Final answer:

AIE will need to borrow approximately $255,102 at an effective interest rate of 6.63%. If the compensating balance requirement is removed, the effective rate will be 6.5%.

Explanation:

a. AIE will need to borrow the amount of the truck ($250,000) divided by 1 minus the compensating balance rate (2%). So, the company will have to borrow $250,000 / (1 - 0.02) = $255,102.

b. The effective interest rate is the discount interest divided by (1 - compensating balance), which is 6.5% / (1 - 0.02). The effective rate is thus approximately 6.63%.

c. If the compensating balance requirement is removed, the effective rate will be the same as the quoted rate, which is 6.5%%.

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Jepson uses the periodic inventory system and the gross method of accounting for purchases. The journal entry that Jepson will make on September 12 is:

Answers

Answer and Explanation:

The journal entry is shown below:

Purchases $6,000  

       To Account payable $6,000

(Being purchases on the account is recorded)  

Here we debited the purchase as it increase the inventory while on the other hand the account payable is credited as it also increased the liability

So the above entry should be recorded

Due to a number of lawsuits related to toxic wastes, a major chemical manufacturer has recently experienced a market reevaluation. The firm has a bond issue outstanding with 15 years to maturity and a coupon rate of 8 percent, with interest being paid semiannually. The required simple rate of return on this debt has now risen to 16 percent. What is the current value of this bond? (Round the answer to the nearest whole number.)​

Answers

Solving a question by financial calculator method. I am using (Texas Instruments BA II plus)

The answer is Current value = $550

First, since it is Semiannual coupon, then we adjust the interest rate to semi-annual rate and also that multiply by 15 years by 2 since we have 2 semi annual periods per year.

Current value

Also Note that: If using the same calculator as me, key in the numbers first before the function .

Then the Total duration of investment ;N is = 15 * 2 = 30

Then Interest rate; I/Y = 16% / 2 = 8%

After that the Face value; FV = 1000

Now the Semi annual Coupon Payment ; PMT = (8%/2)*1000 = 40

then CPT PV = $549.689

Thus,  the current value of this bond is $550 (rounded to whole number.)

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Answer:

Current value = $550

Explanation:

You can solve this question using a financial calculator. I am using (Texas Instruments BA II plus)

First, since it is Semiannual coupon, adjust the interest rate to semi-annual rate and multiply  15 years by 2 since we have 2 semi annual periods per year.

Note: If using the same calculator as me, key in the numbers first before the function .

Total duration of investment ;N = 15 * 2 = 30

Interest rate; I/Y = 16% / 2 = 8%

Face value; FV = 1000

Semi annual Coupon Payment ; PMT = (8%/2)*1000 = 40

then CPT PV = $549.689

Therefore the current value of this bond is $550 (rounded to whole number.)