Answer:
a) 900 dollar as all is M0
b) 900 as the deposit have no multiplier effect
c) 900 as there is no multiplier effect
d) 7,200 taking into consideration the multipler effect from the bank deposit.
e) 4,050 considering the deposit multiplier effect
Explanation:
a; b ; c ) as there is no multiplier effect the quantity of money matches the nominal currency.
d)
M0 (currency and coins) 0
M1 900 / 0.125 = 7,200
e)
currency : 900 / 2 = 450 M0
deposit :
450 / 0.125 = 3,600 M1
Total 4,050
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Answer:
$70,000 loss
Explanation:
the carrying value at December 31, Year 1 = 5,000 shares x $60 per share = $300,000
the fair market value at December 31, Year 1 = 5,000 shares x $46 per share = $230,000
realized loss/gain = fair market value - carrying value = $230,000 - $300,000 = -$70,000 or $70,000 loss
C) Increase interest rates in order to decrease the money supply
During high inflation, the Federal Reserve will increase rates so that it is harder to borrow money and people will not spend as much of what they already have. The goal of this is to slow down economic growth (which is tied to inflation) in the short term.
