The approach to FDI by JogRight Corp. is risky because of the problems associated with doing business in a different culture where the rules of the game may be very different that is option C is correct.
FDI stands for Foreign Direct Investment. It is referred to the investment made by firms or organization in different foreign countries. Usually within an FDI a company buys or setup a firm in a foreign country and gives the people of that country the right to work on their firm while they'll have the overall control. But in this case JogRight Corp. after setting up FDI's in various countries looks into the affairs of the investment by its own instead of giving the rights to the people of that country. This form is risky as they may not be aware of the market conditions of other countries while the people residing there can take care of the company as they are well aware of their market conditions.
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Complete Question:
When it comes to FDI, JogRight Corp. makes greenfield investments in various foreign countries and fully manages all foreign operations on its own. This approach to FDI is risky because of the problems associated with
A. sharing a valuable technological know-how with a potential competitor.
B. an increase in transportation costs, especially for those products that have a low value-to-weight ratio.
C. doing business in a different culture where the rules of the game may be very different.
D. the possibility of an increase in trade barriers such as import tariffs or quotas.
E. increased production costs
suppose you come forward with a usability recommendation, and the engineers counter that with, "all the usage data we have from millions of people suggest that is not a problem." how would you respond?
Usage data even supposing huge numbers no longer suggest a high-quality layout. Clearly placed, consider how generally you had no choice but to use a certain provider although neither the layout nor your experience turned out brilliant!
The time period “usage data” refers to any statistics about how a product or service is used. In the past, the term may only have cited a tourist's moves on a website, or let you know what number of mins a person has used their smartphone.
Usage data series is a function, wherein information is collected on what the person is doing at his/her terminal. EDA will also comprise tools for reading a person's behavior via treating utilization series documents. presently handiest commands are recorded.
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describe why accounts involving significant management estimation are generally viewed as inherently risky
Accounting estimates are necessary when:
1. the measurement of some amounts or the valuation of some accounts is unknown pending the result of future events; or
2. relevant data regarding events that have already occurred cannot be gathered on a timely, cost-effective manner.
The danger of incorrect or deceptive information appearing in financial statements that has occurred for causes other than the failure of controls is known as inherent risk in the practice of accounting. When using complicated financial instruments or issuing profit predictions for next quarters, these situations frequently occur.
The probability of making mistakes while conducting an audit might be considered in connection with inherent risk. Audit risk also involves control risk and detection risk in addition to inherent risk.
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which act mandated that no defendants shall be kept in pretrial detention simply because they cannot afford the monetary bail?
8th Amendments was bail incorporated into in order to prohibit excessive bail act mandated that no defendants shall be kept in pretrial detention simply because they cannot afford the monetary bail.
When was the 8th Amendment incorporated to the states?Justices Scalia and Thomas contend that the following four questions should be addressed: (1) The relevant criterion for deciding whether a punishment is cruel and unusual is the level of severity that prevailed in 1791, the year the Eighth Amendment was adopted.
The Eighth Amendment forbids "cruel and unusual punishments," which are most frequently associated with the death sentence, although it also cites "excessive fines" and bail. The 8th Amendment has an impact on sentencing since it limits how criminal defendants are punished.
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People often select mutual funds for all of the following reasons except which one?
Multiple choice question.
They have plenty of money to diversify on their own.
They lack the expertise to select stock on their own.
They want a professional investment manager selecting their investments.
They want a larger return than a savings account.
People often select mutual funds for all of the following reasons except: A. They have plenty of money to diversify on their own.
What is mutual funds?A mutual fund can be defined as the way in which a company or an organization tend to collect money from several investors and then use the money to buy to buy securities such as:
BondsStock etc.People often select mutual funds because of the following reasons:
Due to lack of expertise to select stock on their own.Because they want a professional investment manager selecting their investments.Because they want a larger return than a savings account.Therefore the correct option is A.
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define transit inventory. multiple choice question. it is the additional inventory produced in advance of seasonal peak demands. it is the inventory of items being transported from one location to another. it is the extra inventory held to guard against uncertainty in demand or supply. it is the inventory of items that are used as maintenance, repair, and operating supplies.
Inventory refers to the recording of products, parts, and raw materials that a company either sells or uses in manufacturing.
Which kind of inventory is utilized throughout the final stages of producing a product?All things that make it through the whole production process and are regarded as final products are included in the finished goods inventory.
Which inventory system is a way to record the balances of the stores at the moment of each receipt and issue to make regular checking and stock taking easier?Perpetual inventory system is a way of keeping track of a store's balances after each receipt and item disbursement to make routine checks easier and avoid having to close for stocktakes.
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"tuition at state university this year is $8,000. " which function of money does this statement best illustrate?.
"Tuition at state university this year is $8,000. " Unit of account function of money does this statement best illustrate.
Unit of Account: What Is It?One of the money functions is the unit of account in economics. A unit of account is a common numerical unit of measurement for money that is used to determine the market value of goods, services, and other transactions.
Why is cash used as a unit of account?Money can be used as a unit of account since it is utilized as a means of exchange for buying and selling as well as a measure of the value of all different sorts of commodities and services. The worth of things might fluctuate over time and via numerous transactions, thus money can keep track of those changes.
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taking the absolute value of the income elasticity of demand is incorrect because it would: remove the ability to tell whether the two products have inelastic demand or elastic demand. cause the value of the cross-price elasticity of demand to become smaller. cause the value of the cross-price elasticity of demand to become zero. remove the ability to tell whether the product is an inferior good or a normal good.
Taking the absolute value of the income elasticity of demand is incorrect because it would remove the ability to tell whether the product is an inferior good or a normal good.
Demand is a monetary idea that pertains to a purchaser's choice to buy goods and services and willingness to pay a particular price for them. An increase in the fee of a great or carrier tends to lower the quantity demanded.
Call for refers back to the customer's desire and willingness to buy products or services at a given duration or through the years. purchasers must also have the potential to pay for something they need or need as decided with the aid of their disposable earnings budget. consequently, demand is a pressure that influences monetary growth and marketplace growth.
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if a $10,000, 12%, 10-year bond that pays interest annually sells at an amount greater than face value, the market rate of interest would be percent. 8 15 20 18
If a $10,000, 12%, 10-year bond that pays interest annually sells at an amount greater than face value, the market rate of interest would be 8 percent.
The relationship between the price of a bond and the interest rate is inverse: as the interest rate increases, the price of the bond decreases, and vice versa.
Therefore, if the bond sells at a price greater than its face value, it means that the interest rate offered by the bond is lower than the market rate of interest. Since the bond in this case offers a 12% interest rate, and it sells at a price greater than its face value, the market rate of interest must be lower than 12%, or 8%.
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jensen is the marketer for globalmovers.com. she's done a comparative analysis of the site against competitor sites. she's convinced that improving the speed and responsiveness of the site will increase its effectiveness and revenue contribution. which statistic should she use to convince the executive leadership of globalmovers.com to make site speed a priority?
Search ranking is the statistic that she should use to convince the executive leadership of globalmovers.com to make site speed a priority.
Search ankings in SEO refers to a website's position within the computer program results page. There ar varied ranking factors that influence whether or not an internet site seems higher on the SERP supported the content relevancy to the search term, or the standard of backlinks inform to the page.
Statistics is that the discipline that considerations the gathering, organization, analysis, interpretation, and presentation of information. In applying statistics to a scientific, industrial, or social downside, it's typical to start with a applied statistical population or a applied statistical model to be studied.
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What are direct competitors?
a) Other businesses that sell the same or similar products or services that a company sells
b) Other businesses that have the same or similar revenue
c) Other businesses that sell products that are different from a business but are similar enough that their products could satisfy the same need
d) Other businesses that have the same or similar investors
Direct opposition Businesses that compete with a corporation by offering identical or comparable goods or services.
What is business?An innovative company or group that engages in professional activities is referred to as a business. They could be industrial, commercial, or something else. Businesses that are for-profit operate to make a profit, whereas those that are nonprofit do so to further a philanthropic cause.
Free cash flow is the amount of money that remains after a company has paid for all of its operating expenses, such as buildings, machinery, payroll, taxes, and inventories.
When two or more businesses compete directly for the same prospective market by providing practically identical goods or services, this is known as direct competition. When two or more businesses fight for the same market by offering the same good or service, this is known as direct competition.
Therefore, Thus option(A) is correct.
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The financial statements of Concord Manufacturing Company report net sales of $744600 and accounts receivable of $86000 and $16000 at the beginning and end of the year, respectively. What is the average collection period for accounts receivable in days?42.2 days50.0 days7.8 days25.0 days
The financial statements of harmony manufacturing corporation report a net income of $744600 and bills receivable of $86000 and $16000 at the beginning and cease of the year, respectively.
Common accounts receivable is calculated because the sum of beginning and ending receivables over a set time frame (normally month-to-month, quarterly, or yearly), is divided by using.
Financial statements are written facts that bring the enterprise sports and the economic performance of an employer. economic statements are frequently audited by way of government corporations, accountants, corporations, and so forth. to make certain accuracy and for tax, financing, or investing functions.
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Hayek Corporation uses the FIFO method in its process costing. The following data concern the company's Mixing Department for the month of August.
Materials Conversion
Work in process, August 1 $31,734 $30,320
Cost added to production in the Mixing Department during August $91,332 $81,864
Equivalent units of production for August 7,740 7,580
Required:
What are the cost per equivalent unit for materials and the cost per equivalent for conversion for the Mixing Department for August using the FIFO method?
The FIFO method is a method that is based on the assumption that the units that were not finished in the previous period were finished at the beginning of the current period.
For the purpose of calculating equivalent units, this strategy takes into account the beginning units, the units that have been completed, and the units that are still in the final work that is being done.
What exactly is FIFO?The easy-to-understand inventory valuation strategy known as FIFO assumes that goods produced or purchased first are sold first. This implies, at least theoretically, that older inventory is shipped to customers first.
What formula does the FIFO method use?The cost of your oldest inventory is multiplied by the amount of inventory sold to calculate FIFO (First-In, First Out), whereas the cost of your most recent inventory is multiplied by the amount of inventory sold to calculate LIFO (Last-in, First-Out).
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how is the perceived demand curve for a monopolistically competitive firm different from the perceived demand curve for a monopoly or a perfectly competitive firm? bartleby
The curve of monopolistically competitive market is very elastic and the curve of monopoly is sloping downwards.
What Is the Demand Curve?The relationship between the cost of an item or service and the amount demanded over a specific time period is represented graphically by the demand curve. A common representation will include the price on the left vertical axis and the amount needed on the horizontal axis.
What does demand curve of monopoly mean?The price that the monopolist may obtain for each new unit of output must decrease as the monopolist raises its output because the monopolist faces the downward-sloping market demand curve. If a result, as the monopolist increases its output, its marginal revenue will also decrease.
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Which of the following statements regarding suctioning of a newborn's mouth and oropharynx is correct?
Select one:
a. Newborns rapidly expel fluid from their lungs and do not require suctioning.
b. Suctioning should be performed on all newborns immediately following delivery.
c. Suctioning is indicated prior to cutting the cord if respiratory distress is present.
d. If the head delivers facedown, the mouth and nose should be suctioned at once.
Option (c), If respiratory trouble is apparent, suctioning is advised before cutting the cord.
What actions should you take if a patient has trouble breathing while being suctioned?If the patient experiences respiratory distress or cardiac decompensation while the suctioning technique is being performed, you should remove the catheter as soon as possible, give them extra oxygen, and if required, give them manual breaths.
When is suctioning not appropriate?Never over-suction. Prolonged suctioning increases the likelihood of hypoxia and other issues. Never suction a patient for longer than 15 seconds. Extended suctioning should be replaced with catheter removal, reoxygenation of the patient, and then another round of sucking.
What situations might call for suctioning a tracheostomy?If there are audible or visible signs of secretions in the tube, suctioning is advised.symptoms of respiratory distress.Suspicion of a prevented the secretions.Vomiting.Desaturation of the pulse oximeter.Learn more about suctioning: https://brainly.com/question/28411967
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a.not enforceable because contracting parties can change their minds.b.not enforceable because the contract clearly favors verizon fios.c.not enforceable because hans was intoxicated enough to lack mental capacity when he agreed to it.d.enforceable.
Not enforceable because Umberto was intoxicated enough to lack mental capacity when he agreed to it.
What is enforceable contract?
Every promise or group of promises that serve as payment for one another constitute an agreement. The Contract is enforceable by law when these promises are recognised as lawful by a court of law and the parties to the Contract are liable for keeping their commitments.
What is an enforceable contract's essential three components?
The promise to perform or refrain from performing a specific activity in the future was made by one of the parties, consideration which is promise of anything of value made in exchange for the intended conduct or inaction and acceptance which means the offer was unmistakably accepted.
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what two documents must be completed by your employer when you are newly hired, and what is the purpose of each?
The two documents must be completed by your employer when you are newly hired are:
(i) The W-4 form enables your employer to deduct the appropriate amount of income tax from your compensation.
(ii) I-9 - Employment eligibility verification.
What is employment?⇒ Employment is a partnership between two people that governs the delivery of compensated labor services. One party, the employer, who may be a company, a not-for-profit organization, a co-operative, or any other entity, pays the other, the employee, in accordance with the terms of a contract in exchange for doing the job that has been allocated to them. Employees perform work in exchange for pay, which may be made in the form of an hourly wage, piecework compensation, or an annual salary, depending on the nature of the work performed, the industry conditions in effect, and the bargaining power of the parties. In some industries, employees could get stock options, bonuses, or gratuities. Employees may also receive benefits in some jobs in addition to compensation.
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as the unit cost of production increases, does profit become more sensitive or less sensitive to changes in unit cost?
Based on the Cost-Volume-Profit Analysis, as the unit cost of production increases, profit becomes more sensitive to changes in unit cost.
Cost-Volume-Profit (CVP) Analysis demonstrates how changes in variable and fixed costs affect a fim's profit. CVP helps a company to see how many units of product it need to sell to reach break even point or reach a certain minimum profit margin. CVP could be calculated using this formula:
Break-even sales volume = Fixed Costs
Sales - Variable costs
When a company raises its unit cost without increasing the product price, its break-even sales volume will increase and the amount of profit it receive will decrease.
Changes on unit costs directly impact on the profitability and financial sustainability. If unit costs increase without a corresponding increase in selling price, the profitability of product will diminish.
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the ceo scraps the company commission-based reward system because it rewards employees for inappropriate behavior. this is an example of
The layout of the company The firm's commission-based reward system is eliminated by the CEO because it encourages inappropriate behavior.
The importance of organization designThrough well-designed organizational structures, communication is enhanced, productivity is raised, and innovation is promoted. It creates a setting that promotes efficient work.
What does design aim to accomplish?A design is a strategy or set of specifications that is used to create a system, an object, or to carry out an action or a process. It can also be the result of these plans or requirements in the shape of a model, final product, or method. The process of designing is what creates a design.
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Lincoln informed the authorities in south carolina that he was going to ______ the island fort in the charleston harbor but not ______ unless the supply ships met with resistance.
Lincoln informed the authorities in south Carolina that he was going to resupply the island fort in the Charleston harbor but not reinforce it with troops and munitions unless the supply ships met with resistance.
What separates weapons and ammunition?Basically, ammunition comprises of shells, powder, fuses, and bullets, whereas munition includes everything like firearms, revolvers, rifles, special weapons, bombs, and missiles. More exactly, munitions are defined as weapons that need ammunition to operate.
Why is a weapon called a shell?Early hollow cast-iron balls filled with gunpowder were called "shells," which were comparable weapons meant to be shot from artillery rather than solid cannonballs. Since the casing is where the word "shell" originates, it has come to refer to the entire munition.
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assuming a country's economy maintains an 3.5% rate of growth, young adults starting at age 20 would see the economy (and average standard of living) in their country tripled by the time they had reached the age of (approximately)
Assuming a country's economy maintains an 3.5% rate of growth, young adults starting at age 20 would see the economy (and average standard of living) in their country tripled by the time they had reached the age of (approximately). 52years
Let's consider economy = 1 when the young adults were 20.
CAGR = (1+r)n-1
n= 33
R = 0.035
=(1+0.035)n-1
=1.035 33-1
=1.035 32
= 3.006
So, it takes 52 years
Increase prices talk over with the percentage alternate of a particular variable inside a selected time period. growth prices can be nice or poor, depending on whether the dimensions of the variable is growing or decreasing through the years.
An economy encompasses all the sports related to the production, consumption, and alternate of products and services in an entity, whether the entity is a nation or a small town. No two economies are identical. every is shaped according to its personal resources, lifestyle, laws, records, and geography.
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The practice by which states extend political, economic, and military power beyond their own borders over an extended period of time to secure access to raw materials, cheap labor, and markets in other countries or regions. (page 399)
Colonialism
Imperialism is the process through which states, over an extended period of time, expand their political, economic, and military influence outside of their own boundaries in order to gain access to markets, cheap labour, and raw supplies in other nations or areas.
Imperialism is the strategy, practise, or advocacy used by the state to increase its power, particularly through direct territorial invasion or by establishing influence over the politics and economies of other regions. Hard power (such as economic and military force) is usually used in this tactic, although soft power can also be used (cultural and diplomatic power).
The expansion of political and economic dominance over new regions through territorial invasion or other methods is known as imperialism and can take the form of a theory, political strategy, practise, governmental policy, or advocacy.
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on january 1, 2025, wildhorse co. had a balance of $439,200 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. the goodwill had an indefinite life. during 2025, the company had the following additional transactions. jan. 2 purchased a patent (5-year life) $341,600. july 1 acquired a 9-year franchise; expiration date july 1, 2034, $658,800. sept. 1 research and development costs $225,700.
Prepare the necessary entries to record the transactions related to intangibles. All costs incurred were for cash. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
Account Titles
Debit
Credit
Make an entry as of December 31, 2022, recording any necessary amortization. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
Indicate what the intangible asset account balances should be on December 31, 2022
Patent:
Franchise:
A loan's or an intangible asset's book value can be periodically reduced over a predetermined period of time by using the accounting technique known as amortization.
Amortization of a loan concentrates on extending loan payments over time. Amortization is similar to depreciation when it comes to an asset.
Journal entries
Date Account Titles and Explanation Debt Credit
1/2/22
Patents 368550
Cash 368550
7/1/22
Franchise 583200
Cash 583200
9/1/22
Research and development expense 177500
Cash 177500
Account Titles and Explanation Debt Credit
Amortization expense 106110
Patents 73710 =368550/5
Franchise 32400 =583200/9*6/12
Patent: 294840 =368550-73710
Franchise: 550800 =583200-32400
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Assessment A risk assessment for a country that includes all country risk variables, but excludes factors which are specific to a particular firm. An assessment that focuses on the risk of a country as it pertains to a specific MNC or type of business.
Option:
Micro Assessment of Country Risk Macro Assessment of Country Risk
Macro evaluation of country risk for a nation that takes into account all country risk indicators, but leaves out those that are unique to a single company. Here option D is the correct answer.
The major objective of a country risk assessment is to evaluate a country's capacity for currency transfers for international payments. Numerous elements, which may be categorized as political, economic, and financial considerations, influence this capacity.
A corporation can examine and identify nation-specific risks with the use of a country risk assessment. Businesses may then assess the potential effect of such risks on their operations and select the best course of action for managing or reducing those risks. It is impossible to emphasize the significance of this kind of country risk analysis.
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In the __________, if profits are not possible, the perfectly competitive firm will seek out the quantity of output where ___________.a)short run;fixed costs can be reducedb)long run; fixed costs can be eliminatedc)short run; losses are smallestd)long run; increasing production
In the short run, if profits are not possible, the perfectly competitive firm will seek out the quantity of output where losses are smallest.
The term "price taker" refers to a completely competitive company that is compelled by pressure from other enterprises to accept the market's current equilibrium price. A company in a highly competitive market risks losing all of its sales if it increases the price of its goods by even a cent.
Perfect competition is characterized by three key elements: freedom of entry and leave, standardization of industry output, and the absence of any companies with a sizable market share. When marginal revenue and marginal cost are identical, the market is in an efficient equilibrium.
Hence the correct option is C
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Phoebe Johnson is a senior HR executive at CarMakers Corp. She has been informed that the company needs to hire five line workers for their Kingston plant. Phoebe decides to go down to the plant to get a better idea of the work. She speaks to the line workers there and gets firsthand information about the important aspects of the job involved. Phoebe is using the ________ method to collect information.
1) job family description 2) entry examination 3) job profiling 4) desk audit
Senior HR executive Phoebe Johnson works for CarMakers Corp. Phoebe is gathering data that use the desk audit technique.
By audit, what do you mean?A physical inventory check is followed by an auditor's review or inspection of different books of accounts to ensure that all divisions are using the same documented system of documenting transactions. It's done to make sure the organization's financial accounts are accurate.
What three sorts of audits are there?Internal audits, IRS audits, and external audits are the three primary categories of audits. Certificate Public Accountant (CPA) firms frequently carry out external audits, which produce a literature review and included in the audit findings.
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the loan origination market, in which borrowers and lenders come together to provide adequate financing for the purchase of a property, is more commonly referred to as the:
The loan origination market, in which borrowers and lenders come together to provide adequate financing for the purchase of a property, is more commonly referred to as the:
Primary mortgage market.
In order to get mortgages for both owner-occupied homes and investment properties, potential homeowners must first interact with key lenders in the primary mortgage market. Prior to being sold to investors in the secondary mortgage market, mortgage loans originate in the primary mortgage market.
Borrowers seeking for a mortgage lender make up the whole main mortgage market. The market for second-hand mortgages is a very different animal. Investors transact in existing mortgages generated by the main mortgage market and packaged as mortgage-backed securities on the secondary mortgage market. The loan enters the secondary mortgage market once the mortgage has closed.
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The yield to maturity on one-year zero-coupon bonds is 7.4%. The yield to maturity on two-year zero-coupon bonds is 8.4%.
a. What is the forward rate of interest for the second year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Forward rate of interest
b. If you believe in the expectations hypothesis, what is your best guess as to the expected value of the short-term interest rate next year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Short-term interest rate %
c. If you believe in the liquidity preference theory, is your best guess as to next year's short-term interest rate higher or lower than in
O Higher O Lower
The forward rate of interest for the second year is 9.41%. According to expectations hypothesis, the expected value of the short- term value of the short term interest rate next year would be 9.41%. The next year's short-term interest rate will be lower.
The explanations and computations are as under:
a. 9.41%
b. According to expectations hypothesis the expected value of the short- term value of the short term interest rate next year would be 9.41% since the forward rate exceeds the expected value of the short - term interest rate next year
c. Lower
According to the liquidity preference hypothesis, since the forward rate exceeds short- term interest rate next year, so the best guess would be less than 9.41%
Working note
The forward rate (f2) is the spot rate plus earnings as the return from investing in the two - year maturity bond and holding to maturity
(1 + 7.4%) x (1 + forward rate ) = (1 + 8.4%)^2
Solving equation
1.074 x (1 + f2) = 1.175056
f2 = (1.175056 - 1.074) / 1.074
f2 = 9.41%
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in what year(s) did the usa peak (reach a maximum) in oil production? what happened to the amount of oil imported by our country from 1980 to 2010? (2 points)
In 1970, oil output in the USA reached its high. Since then, the quantity of oil we import has skyrocketed.
What does the word "production" mean exactly?
producing something; creating something useful. specifically: the process of making products usable; overall output, particularly of a product or an industry. The definition of a production process is the action that transforms inputs of resources, or the components of production, into useful outputs.
What does production serve as a means for?
"Producing is indeed the organized method by which crude ingredients into completed products and services; the goal of producers is to satiate the need for such transformed resources."
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"tuition at state university this year is $8,000. " which function of money does this statement best illustrate?.
"State University's tuition this year is $8,000." The statement "unit of account is the function of money" best demonstrates.
Why does money serve a purpose?As a result, money has always been used as a reserve of value, an account unit and a medium of trade, despite the fact that it has existed throughout history in a variety of forms. Money that is not backed by nor represented by a physical good is known as fiat currency, which is used in modern economies.
Money fulfills three roles: it serves as a unit of account, a store of value, and a medium of exchange. an interchangeable medium. Acting as an exchange medium for transactions is the main function of money.
Who set the intentions behind the creation of money?In his renowned book Money and the Mechanism of Exchange, William Stanley Jevons described money in terms of four uses (1875). These four roles are: a medium of exchange, a standard of value (or standard of deferred payment), a standard of value (or unit of account), and a store of value.
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the required reserve ratio is 12 percent and first national bank sells $120 of its short-term securities to the federal reserve. this action will
First National Bank sells $120 worth of its short-term securities to the Federal Reserve in accordance with the 12 percent mandated reserve ratio. First National's reserves will rise by $120 as a result of this decision. It has a $240 surplus in reserves.
The minimum percentage of deposits that banks and other financial institutions are required to hold in reserves by the Federal Reserve is known as the required reserve ratio. when the Fed conducts a sizable open market purchase to generate bank reserves at a low or possibly zero federal funds rate.
Simply dividing the amount of money a bank must keep in reserve by the amount of money it has on deposit yields the required reserve ratio. For instance, if a bank had to hold $500,000 in reserves along with its $10 million in deposits, the minimum reserve ratio would be 1/20, or 5%.
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First National Bank
Assets
Liabilities and Owners' Equity
Reserves
$1,200
Deposits
$9,000
Loans
$8,000
Debt
$800
Short-term securities
$800
Capital (owners' equity)
$200
Refer to Table 29-8. The required reserve ratio is 12 percent and First National Bank sells $120 of its short-term securities to the Federal Reserve. This action will