Answer:
The correct option is (b)
Explanation:
According to the scenario, the foreign currency that original sold at the market is shown below:
= (Forward rate to Jan 15 - Spot rate) × paymen made
= ($0.00089 - $0.00082 ) × 20 million
= $0.00007 × 20,000,000
= $1,400 premium
hence, the foreign currency that originally sold at the market is $1,400 premium
Therefore the correct option is (b)
If the cost of the beginning work in process inventory is $60,000, costs of goods manufactured is $890,000, direct materials cost is $330,000, direct labor cost is $210,000, and overhead cost is $315,000, calculate the ending work in process inventory.a. $350,000
b. $35,000. c. $355,000. d. $45,000. e. $25,000.
Answer:
Ending WIP= $25,000
Explanation:
To calculate the ending work in process, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
890,000 = 60,000 + 330,000 + 210,000 + 315,000 - Ending WIP
Ending WIP= 915,000 - 890,000
Ending WIP= $25,000
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 26 percent for the next three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 12 percent, and the company just paid a dividend of $1.90, what is the current share price?
Answer:
$ 55.04
Explanation:
Year 1 dividend=$1.90*(1+26%)=$2.394
Year 2 dividend=$2.394 *(1+26%)=$3.01644
Year 3 dividend=$3.01644 *(1+26%)=$3.8007144
Terminal value of dividend=Year 3 dividend*(1+terminal growth rate)/(required return-terminal growth rate)
Terminal value of dividend=$3.8007144 *(1+6%)/(12%-6%)=$67.1459544
The current share price is the present value of expected dividends and terminal value as below:
share price=$2.394 /(1+12%)^1+$3.01644 /(1+12%)^2+$3.8007144 /(1+12%)^3+$67.1459544/(1+12%)^3
share price=$55.04
Priya has held several different positions within the same company. She has been an Assistant to the Marketing Manager, a Sales Representative, and a Budget Analyst. Priya is being considered for a promotion at her place of employment. Based on her prior experience, which would be the most likely position for Priya to be promoted to?
Chief Executive Officer
Marketing Manager
Training Specialist
Credit Analyst
FIRST ANSWER GETS BRAINLIEST
Answer:
Marketing Manager
Explanation:
Given the institutional differences between European and Eurasia markets, what are the main challenges faced by TeliaSonera in Eurasia?
Answer:
The European market and Eurasia markets are different in many ways.
Explanation:
The legal, economic and the regulatory systems in each of the country in Eurasia are highly bureaucratic, although market economy is in different phase transition. The operation of TeliaSonera in Eurasia tries to utilize the know-how mainly in communication, investments and infrastructure where institutional framework are in transitional phase from planned to the market economy and is its weaker than in Europe.
TeliaSonera, due to their weak institutional regulations and settings, faces challenges in Eurasia specially in the former USSR.
When the order acceptance occurs during the early portions of the production lead time, how would you describe the current manufacturing environment? a. Make to stock (MTS) b. Assemble to order (ATO) c. Make to order (MTO) d. Assemble to stock (ATS)
Answer:
The current manufacturing environment would be described as:
c. Make to Order (MTO).
Explanation:
The 'make to order' strategy means that the company accepts orders during the production lead time and produces products based on the customer's specifications. The goods will not be stocked after production, instead they will be shipped to the customer who requested for them immediately after production. It is unlike 'make to stock' production strategy, where orders result from production planning based on sales estimates.
mehak Shergill????????
Answer:
wowowowowowowowowowowowoowowowo
Explanation:
kya clark borrowed 7500 ay 6%ordinary interest for 180 days after 40 days she made a partial payemnt of 2500 after another 70 days kya made a second partial payment of 3000 using the U.S rule what is the final amount due?
Answer:
$2,133.52
Explanation:
lets try to put some dates into the question:
Kya borrowed $7,500 on June 1.
On July 10, she made a partial payment of $2,500. The loan's balance on July 10 was $7,500 + [$7,500 x 6% x 40/360 (remember ordinary interest is 360 days)] = $7,550 - $2,500 = $5,050
On September 18, Kya made a second payment of $3,000. The loan's balance before the payment = $5,050 + ($5,050 x 6% x 70/360) = $5,108.92 - $3,000 = $2,108.92
On November 27 when her loan is due, she will need to pay $2,108.92 + ($2,108.92 x 6% x 70/360) = $2,133.52
Real income is:___________ a) Nominal income adjusted for inflation. b) The amount of money income received in a given time period, measured in current dollars. c) The use of nominal dollars to gauge changes in income. d) None of the other choices.
Answer:
A. Nominal income adjusted for inflation.
Explanation:
Real income is simply the amount usually in monetary terms a person, enterprise or others makes after accounting for inflation. It is also called real wage that is an individual's income.
Real income are also defined as Income that is adjusted to inflation.
Nominal income are defined as income not adjusted to inflation.
Assume that Clampett, Inc. has $200,000 of sales, $150,000 of cost of goods sold, $60,000 of interest income, and $40,000 of dividends. Assume that Clampett, Inc. never operated as a C corporation and that the corporate tax rate is 21%. What is Clampett, Inc.'s excess net passive income tax?
A- 0
B- $21,000
C- $75,000
D- $100,000
E- None of these choices are correct
Answer:
B $21,000
Explanation:
Given that;
Sales = $200,000
Cost of goods sold = $150,000
Interest income = $60,000
Dividends = $40,000
Tax rate = 21%
Then,
Net passive income tax = Net passive income × Tax rate
Or
= (Interest income + Dividends) × Tax rate
= ($60,000 + $40,000) × 21%
= $21,000
Suppose the economy is at a point below its physical production possibilities frontier but above its institutional production possibilities frontier. In response to this situation, Keynesian economists may propose that government enact ________ fiscal policy to correct this ________ gap by ________ government expenditures.
Answer: contractionary; inflationary; decreasing
Explanation:
A contractionary fiscal policy is used in order to reduce the money that is in circulation. In this policy, the government increases tax and also cuts its spending.
The contractionary fiscal policy will be used according to Keynesian to correct the inflationary gap by decreasing the expenses of the government.
Sahia company bought a building for 90,000 cash and the land on which it was located for 1,10,000 cash. The company paid a transfer cost of 10,000. Renovation cost on the building were $31,000.1. What would be the net book value of the property (land and building) at the end of year 2?2. Prepare the journal entry to record the purchase of the property, including all relevant expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year.3. Compute straight-line depreciation at the end of one year, assuming an estimated 10-year useful life and a $9,000 estimated residual value. Straight-line depreciation 106,000
Answer:
Sahia Company
1. Net book value of the property at the end of year 2 = $217,800.
2. Journal entry to record the purchase:
Debit Property (land and building) $241,000
Credit Cash Account $241,000
To record the acquisition of the property.
3. Straight-line depreciation (on building only) = $11,600.
Explanation:
a) Data and Calculations:
Bought building for cash = $90,000
Bought land for cash = 110,000
Transfer cost = 10,000
Renovation on building = 31,000
Book value of property = $241,000
Depreciation:
Building cost = $90,000
Transfer cost 4,500 ($10,000*90,000/200,000)
Renovation 31,000
Total cost = $125,500
Residual value 9,000
Depreciable value = $116,000
Depreciation per annum = $11,600 ($116,000/10)
a) Land is not subject to depreciation and its value is $115,500 or $110,000 + 5,500 ($10,000*110,000/200,000).
b) The net book value of the property at the end of year 2 is
Building $125,500 - 23,200 = $102,300
Land = 115,500
Net book value of property = $217,800
Which of the following statements is false?
Millions of people can't afford to make their student loan payment every month.
Our culture accepts student loan debt as normal and sometimes even refers to it as
good debt.
Debt is owing anything to anyone for any reason.
A student loan is an award.
Suppose that because of a sudden increase in life expectancy, a lot of people decide to save more for what they expect to be a longer retirement. This will:____.1. shift the demand for loanable funds to the right causing the interest rate to rise. b. shift the demand for loanable funds to the left causing the interest rate to fall. c. shift the supply of loanable funds to the left causing the interest rate to rise. d. shift the supply of loanable funds to the right causing the interest rate to fall.
Answer: d. shift the supply of loanable funds to the right causing the interest rate to fall.
Explanation:
Loanable funds come from the deposits(savings) that people make in financial institutions like banks. If more people were to make deposits, the amount of savings in the system would therefore increase.
To illustrate this increase the supply for loanable funds curve will shift to the right which will cause the interest rates to fall as there is now more supply relative to demand.
Over the past four years, the annual percentage returns on large-company stocks were 15, 7, 4, and 18%. For the same time period, U.S. Treasury bills produced the returns of 6, 3, 2, and 4 percent. Inflation averaged 2.8% over the four-year period. The average real rate of return on large-company stocks was ___% as compared to _____% for Treasury bills.a. 6.47; .92.
b. 6.47; 1.08.
c. 7.98; .92.
d. 7.98; 1.08.
e. 7.98; 1.22.
Answer:
c. 7.98; .92.
Explanation:
My calculations varied slightly (0.02% and 0.01%), but the error might be a rounding error. Option C is the logical answer since the difference is minimum.
real rate returns from stocks:
15% - 2.8% = 12.2%
7% - 2.8% = 4.2%
4% - 2.8% = 1.2%
18% - 2.8% = 15.2%
average real return = 8.2% arithmetic mean
average real return = 8% geometric mean
real rate returns from US T-bills:
6% - 2.8% = 3.2%
3% - 2.8% = 0.2%
2% - 2.8% = -0.8%
4% - 2.8% = 1.2%
average real return = 0.95% arithmetic mean
average real return = 0.93% geometric mean
Initial Outlay -$5,000 Year 1 $3,000 Year 2 $3,500 Year 3 $3,200 Year 4 $2,800 Year 5 $2,500. a. What is the PI if the discount rate is 20%?b. What is the NPV if the discount rate is 20%? Round to the second decimal place. Type only numbers without any unit ($, %, etc.) If there are multiple answers, then type NA.c. What is the IRR if the discount rate is 20%? Answer in the percent format. Round to the hundredth decimal place. Type only numbers without any unit ($, %, etc.)d. What is the EAA if the discount rate is 20%? Round to the penny. Type only numbers without any unit ($, %, etc.)
Answer:
a. What is the PI if the discount rate is 20%?
profitability index = present value of cash flows / initial outlay
PI = $9,137.41 / $5,000 = 1.83
b. What is the NPV if the discount rate is 20%?
NPV = -$5,000 + $9,137.41 = $4,137.41
c. What is the IRR if the discount rate is 20%?
the discount rate is irrelevant when you are calculating the IRR, since the IRR is the discussion rte at which the NPV = $0
IRR = 55.23%
Explanation:
Initial Outlay -$5,000
Year 1 $3,000
Year 2 $3,500
Year 3 $3,200
Year 4 $2,800
Year 5 $2,500.
If you are under 59 % and you withdraw money from your traditional IRA, which of the following is the exception to the additional penalty tax?
Choose one answer.
a. You are disabled
b. You have unreimbursed medical expenses that are more than 7.5% of your AGI
c. You are the beneficiary of a deceased IRA owner
d. All of these
e. None of these
Answer:
A-You are disabled
Explanation:
If you're disabled, you can withdraw IRA funds without penalty. If you pass away, there are no withdrawal penalties for your beneficiaries. You can avoid an early withdrawal penalty if you use the funds to pay unreimbursed medical expenses that are more than 7.5% of your adjusted gross income (AGI).
In 2019, longtime partner ________ was so unhappy with its Amazon relationship that it dropped the firm for both air and ground deliveries.
Answer:
"FedEx" would be the correct answer.
Explanation:
Lengthy-time supplier FedEx had been so disappointed with some of its Amazon partnership throughout 2019 that something that dumped the business with both aerial refueling as well as surface deliveries. Investment opportunities by Amazon in its distribution program irritated FedEx as well as leading to the split of the businesses.Troy's financial records for the year reflect the following:Interest income from bank savings account $ 900Taxable annuity receipts 1,800Safe deposit box rental (to hold annuity documents) 125Investment interest expense 3,200Calculate Troy's net investment income and his current investment interest deduction.Assume that Troy does not itemize his personal deductions. How is any potential excess investment interest deduction treated?
Answer and Explanation:
The computation of the investment income, the deduction of interest on investment, and the treatment of the deduction of interest on investment is given below:
Investment income is
= $900 + $1,800
= $2,700
And,
Investment expenses = $125
So,
Net investment income is
= $2700 - $125
= $2,575
And,
Investment interest paid = $3,200
The allowed deduction would be lower of interest on investment and the net investment income
So, the allowable deduction would be $2,575
Now the remaining amount i.e. disallowed is
= $3,200 - $2,55
= $625
This amount would be carried forward to the future years
The Ultimate recreational tennis racket NWC requirements at the beginning of each year will be approximately 20 percent of the projected sales during the coming year. The tax rate is 34 percent and the required return on the project is 10 percent. What will the cash flows for this project be?
Answer:
The question is incomplete, it only includes the last part. So I looked for similar questions and found it:
You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that wimpy backhand. You estimate the sales price of The Ultimate to be $400 per unit and sales volume to be 1,000 units in year 1; 1,250 units in year 2; and 1,325 units in year 3. The project has a three-year life. Variable costs amount to $225 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $165,000 in assets, which will be depreciated straight-line to zero over the three-year project life. The actual market value of these assets at the end of year 3 is expected to be $35,000. NWC requirements at the beginning of each year will be approximately 20 percent of the projected sales during the coming year. The tax rate is 34 percent and the required return on the project is 10 percent.
What will the cash flows for this project be?
initial outlay = -$165,000
depreciation expense per year = $55,000
change in NWC:
year 1 = 1,000 x $400 x 20% = $80,000year 2 = 1,200 x $400 x 20% = $96,000, so it is a $16,000 increaseyear 3 = 1,350 x $400 x 20% = $108000, so it is a $12,000 increasecontribution margin per unit = $400 - $225 = $175
after tax salvage value = $35,000 x (1 - 34%) = $23,100
cash flow year 0 = -$165,000 - $80,000 = -$245,000
cash flow year 1 = {[($175 x 1,000) - $100,000 - $55,000}] x 0.66} + $55,000 - $16,000 = $52,200
cash flow year 2 = {[($175 x 1,200) - $100,000 - $55,000}] x 0.66} + $55,000 - $12,000 = $79,300
cash flow year 3 = {[($175 x 1,350) - $100,000 - $55,000}] x 0.66} + $55,000 + $108,000 + $23,100 = $239,725
On May 1, 2025, Hecala Mining entered into an agreement with the state of New Mexico to obtain the rights to operate a mineral mine in New Mexico for $10.1 million. Additional costs and purchases included the following: Development costs in preparing the mine $2,500,000Mining equipment 143,400Construction of various structures on site 36,500After the minerals are removed from the mine, the equipment will be sold for an estimated residual value of $12,000. The structures will be torn down. Geologists estimate that 730,000 tons of ore can be extracted from the mine. After the ore is removed the land will revert back to the state of New Mexico. The contract with the state requires Hecala to restore the land to its original condition after mining operations are completed in approximately four years. Management has provided the following possible outflows for the restoration costs:Cash Outflow Probability$530,000 40%630,000 30%730,000 30%Hecalaâs credit-adjusted risk-free interest rate is 7%. During 2021, Hecala extracted 113,000 tons of ore from the mine. The companyâs fiscal year ends on December 31.Required:a. Determine the amount at which Hecala will record the mine.b. Calculate the depletion of the mine and the depreciation of the mining facilities and equipment for 2021, assuming that Hecala uses the units-of-production method for both depreciation and depletion.c. How much accretion expense will the company record in its income statement for the 2021 fiscal year?d. Are depletion of the mine and depreciation of the mining facilities and equipment reported as separate expenses in the income statement?e. During 2022, Hecala changed its estimate of the total amount of ore originally in the mine from 730,000 to 930,000 tons. Calculate the depletion of the mine and depreciation of the mining facilities and equipment for 2022 assuming Hecala extracted 143,000 tons of ore in 2022.
Answer:
Hecala Mining
a) Hecala will record the mine at a cost of $12600,000
b1) Depletion of Mine for 2021:
= 113,000 * $17.26
= $1,950,380
b2) Depreciation of mining facilities and equipment for 2021:
= 113,000 * $0.23
= $25,990
c) Accretion expense:
= $155,000 * 0.763
= $118,265
d) Yes. The depletion of the mine and the depreciation of the mining facilities and equipment are reported as separate expenses in the income statement.
e1) Depletion of mine in 2022:
= $13.04 * 143,000
= $1,864,720
e2) Depreciation of facilities and equipment:
= $0.17 * 143,000
= $24,310
Explanation:
a) Data and Calculations:
Cost of Mining rights = $10,100,000
Development costs = 2,500,000
Cost of mines = $12,600,000
Construction of facilities = $36,500
Mining equipment = $143,500
Salvage value 12,000
Depreciable value of equipment 131,500
Cost of facilities & equipment $168,000
Geologists production estimate = 730,000 tons
Period of mining = 4 years
b) Cost of Mine Restoration:
Cash Outflow Probability Expected cost
$530,000 40% $212,000
630,000 30% 189,000
730,000 30% 219,000
Costs of Mine Restoration $620,000
Interest rate = 7%
Annual cost of mine restoration = $155,000 ($620,000/4)
c) Depletion of mine based on original output estimate:
= $12,600,000/730,000
= $17.26 per ton
Revised Depletion of mine:
Depleted cost of mine = $12,600,000 - $1,950,380 = $10,649,620
Depleted tons balance = 930,000 - 113,000 = 817,000 tons
Depletion per ton = $10,649,620/817,000 = $13.04 per ton
d) Depreciation rate of facilities and equipment:
= $168,000/730,000
= $0.23 per ton
Revised Depreciation rate:
Cost of facilities and equipment = $142,010 ($168,000 - $25,990)
Rate = $142,010/817,000
= $0.17 per ton
What is the difference between a departmental accounting system and a responsibility accounting system? Are the reports of departmental net income and the departmental contribution to overhead useful in assessing a department manager's performance? Explain
Answer:
Part 1
Department Accounting system seeks to establish the Departmental Economic Performance whilst the Responsibility Accounting System seeks to establish the Performance of Personnel Responsible for a particular department.
Part 2
No, reports of departmental net income and the departmental contribution to overhead are not useful in assessing a department manager's performance.
Because, they take into account those incomes and costs attributable to the particular department including central costs. This means it ignores whether or not the costs were wholly controllable by the manager.
Explanation:
Department Accounting system seeks to establish the Departmental Economic Performance whilst the Responsibility Accounting System seeks to establish the Performance of Personnel Responsible for a particular department.
The reports of departmental net income and the departmental contribution to overhead are not useful in assessing a department manager's performance this is because they take into account those incomes and costs attributable to the particular department including central costs. This means it ignores whether or not the costs were wholly controllable by the manager.
In assessing a department manager's performance, we look into incomes and expenses that were sorely within their control other than those items that are just attributable to the department they are responsible for.
People who take a loan from a bank have the responsibility to:
A. spend all of their savings to pay off the loan as quickly as
possible.
B. pay the full amount of each monthly payment without being late.
C. use the same bank whenever they want to take out another loan.
D. never take out another loan until the first one is paid off.
Answer:
B
Explanation: Just answered it
People who take loan from a Bank have the responsibility to pay the full amount of each monthly payment. Hence, option B is correct.
Rules for Bank LoanThe Person who took loan from Bank has the responsibility to pay the due amount to the bank within the time limit given by the Bank. If a person failed to do so, he is charged with late fees and also it affects his future loan taking perspectives.
Hence, People who take loan from a Bank have the responsibility to pay the full amount of each monthly payment. Therefore, option B is correct.
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The following information is available on a depreciable asset owned by Mutual Savings Bank:___________.
Purchase date July 1, Year 1
Purchase price $78,100
Salvage value $10,900
Useful life 8 years
Depreciation method straight-line
The asset's book value is $61,300 on July 1, Year 3. On that date, management determines that the asset's salvage value should be $5,900 rather than the original estimate of $10,900. Based on this information, the amount of depreciation expense the company should recognize during the last six months of Year 3 would be:_________.
a. $4,616.67
b. $2,554.17
c. $2,308.33
d. $1,854.17
e. $2,241.37
A total asset turnover ratio of 3.0 indicates that:
For every $1 in sales, the firm acquired $3.0 in assets during the period.
For every $1 in assets, the firm produced $3.0 in net sales during the period.
For every $1 in assets, the firm earned gross profit of $3.0 during the period.
For every $1 in assets, the firm earned $3.0 in net income.
For every $1 in assets, the firm paid $3.0 in expenses during the period.
Answer and Explanation:
The computation of the depreciation expense under the straight-line method is shown below:
= (Purchase cost - residual value) ÷ (Remaining life left)
= ($61,300 - $5,900) ÷ ( 8 - 2)
= $55,400 ÷ 6 years
= $9,233.33
Now for the six months it would be
= $9,233.33 × 6 months ÷ 12 months
= $4,616.67
The asset turnover is the turnover that comes by dividing the revenue from the average of the total assets
Here as per the given option the second option is correct as it correctly represents the asset turnover
A home mortgage that can be repaid over a 30-year period is an example of:
A. a line of credit.
B. a student loan.
C. a short-term loan.
D. a long-term loan.
Answer:
D. a long-term loan.
Explanation:
Loans are classified based on varied parameters. There are secure and unsecured loans, installment credit and revolving credit. Also, there loans with fixed interest rates and others with variable interest rates.
Loans are also categorized depending on the duration it takes to repay them. Short term loans are those repaid with one year. For businesses, these loans are short term liabilities.
Long-term loans take longer than one year to repay. The mortgage is to be paid over 30 years period. To businesses, these loans are long-term liabilities.
A 2-year maturity bond with face value of $1,000 makes annual coupon payments of $80 and is selling at face value. What will be the rate of return on the bond if its yield to maturity at the end of the year is: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Rate of Return a. | 6% b. | 8% c. | 10%
Solution:
Annual coupon payment of the bond is $80
At the beginning of the year, remaining maturity period is 2 years.
Price of the bond is equal to face value, i.e. the initial price of the bond is $1000.
New price of the bond = present value of the final coupon payment + present value of the maturity amount.
New price of the bond = [tex]$\frac{80}{1+r} +\frac{1000}{1+r}$[/tex]
where, r is the yield to maturity at the end of the year.
Substitute 0.06 for r in the above equation,
Therefore new price of the bond is = [tex]$\frac{80}{1+0.06} +\frac{1000}{1+0.06}$[/tex]
= [tex]$\frac{1080}{1.06}$[/tex]
= $ 1010.87
Calculating the rate of return of the bond as
[tex]$\text{rate of return}=\frac{\text{coupon+new price-old price}}{\text{initial price}}$[/tex]
[tex]$=\frac{80+1018.87-1000}{1000}$[/tex]
= 0.09887
Therefore, the rate of return on the bond is 9.887%
≈ 10 %
Which situation best illustrates the process of capital formation?
A. A pilot tries to save
money by limiting her weekly spending.
B. A banker takes out a high-interest loan to buy a new car.
C. A restaurant server decides to use his savings to buy stock in a
business.
D. A farmer diversifies his crops by growing many different kinds.
Answer: C
Explanation: A.P.E.X
Answer:c
Explanation:
A mindset refers to regard for global culture and identification with individuals everywhere. These people are less influenced by "buy local" promotions, resulting in demand being more elastic. Select one: a. global ( b. domestic ( c. regional (d. state
Answer:
A
Explanation:
The change in demand as a result of a price change is large inelastic demand, explained further.
What does demand elastic mean?The change in demand as a result of a price change is large in an elastic demand. A demand that is inelastic is one in which the change in demand as a result of a price change is modest.
A mentality is defined as a respect for global culture and affiliation with people all over the world. Because they are less affected by "buy local" promotions, demand is more elastic and global.
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How Much more did the average household spend on appliances, electronics, and furniture when it recieved the 2008 tax rebate?
Answer:
The households spent an average of $91 on durable goods like furniture, appliances, and electronics when they received a tax rebate in 2008.
Explanation:
In 2008, The U.S Federal government made an economic stimulus payment or tax rebate to American households of 90 billion dollars. This made a huge impact on the consumer market as the households spent more of the received payment on goods and services they both wanted and needed.
Which one of the following is not one of the four most common ways people can save money in banks?
money market accounts
fractional reserves
checking accounts
certificates of deposit
Answer:
Fractional Reserves
Explanation:
Banks are required to hold money to lend out. If you deposit $100 into your account that is $100 for the bank to lend that money out to ones who need it.
Fractional reserves are not one of the four most common ways people can save money in banks. Fractional reserves are a banking system in which only a fraction of bank deposits are backed by actual cash on hand and are available for withdrawal. The correct option is B.
How are fractional reserves used?With fractional-reserve banking, the bank is only obligated to keep a portion of customer deposits on hand, freeing it up to lend the remainder of the money. While having enough cash on hand to cover withdrawal demands, this strategy is intended to continuously stimulate the amount of money available in the economy.
Fractional reserves are not one of the four most common ways people can save money in banks because it is not a savings option for consumers. Fractional reserve banking is a system used by banks to create money and lend out a portion of their deposits while keeping a fraction of the deposits in reserve.
This process is not related to individual savings and is a function of the banking system. The four most common ways people can save money in banks are checking accounts, savings accounts, money market accounts, and certificates of deposit.
Thus, the ideal selection is option B.
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Suppose that the market for a product is characterized by a downward-sloping, linear demand curve and an upward-sloping, linear supply curve.
(a) Suppose the price elasticity of supply is 0.6. Will the deadweight loss from a $2 tax per unit be smaller if the absolute value of the price elasticity of demand is 0.3 or if the absolute value of the price elasticity of demand is 1.5? Explain.
(b) If a $2 tax per unit results in a deadweight loss of $100, how large would be the deadweight loss from a $4 tax per unit? Explain.
Answer:
A) The deadweight loss will be greater when the absolute value of price elasticity of demand = 0.3
B) The deadweight loss is bigger when the value of Nd is larger and also
since a $2 tax per unit results in a deadweight loss of $100 the deadweight loss for a $4 tax per unit will be 2 times larger i.e. $200
Explanation:
A) Given
price elasticity of supply (Ns)= 0.6
absolute value of elasticity (Nd) = 0.3
absolute value of elasticity 2 ( Nd ) = 1.5
we will apply the deadweight rule here
DWL = -0.5*(Ns Nd)/(Ns - Nd ) * (t^2) * Q/P
For;
( Nd = 0.3 ) = -0.5*( 0.6*0.3) / (0.6-0.3 ) * 2^2
= - 0.5 * ( 0.18 / 0.3 ) * 4 = -1.2
( Nd = 1.5 ) = -0.5*(0.6*1.5 )/( 0.6 - 1.5 ) * 2^2
= -0.5 * ( 0.9 ) / (-0.9) * 4 = 2
The deadweight loss will be greater when the absolute value of price elasticity of demand = 0.3
B) The deadweight loss is bigger when the value of Nd is larger and also
since a $2 tax per unit results in a deadweight loss of $100 the deadweight loss for a $4 tax per unit will be 2 times larger i.e. $200
