When the Federal Reserve wants to increase the money supply, it will purchase bonds from banks.
<h3>What is Federal Reserve?</h3>
It should be noted that the Federal Reserve controls the monetary aspect in an economy.
In this case, when the Federal Reserve wants to increase the money supply, it will purchase bonds from banks.
Also, when the Fed wants to decrease the money supply, the thing that should be done will be to sell bonds.
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Answer:
The money in the 401(k) account is not taxed until withdrawn.
Explanation:
A 401 (k) can be defined as a type of compensation (savings) plan that is being sponsored by a business firm or company (employer) to avail its employees the opportunity to contribute into. As a company-sponsored and defined-contribution retirement savings plan, it offers tax advantages to the employees because it reduces their income tax for the particular year while taxing their withdrawals.
A good reason to contribute to a 401 (k) retirement account is that, the money in the 401 (k) account is not taxed until withdrawn. Thus, the money contributed by an employee to a 401 (k) will maintain its tax-deferred status until he or she withdraws it.
For example, a 401 (k) would be the best retirement savings option for a 50-year old medical doctor whose employer offers a 5% contribution match.
1. is true, and the 2. is false
Answer: Optimization of resource allocation
Explanation: Macroeconomics, in simple words, refers to the study of economy as whole. It focuses on factors, the impact of which is high on economy such as interest rates and national productivity.
One of many concerns that macroeconomics deals with is optimization of resource allocation, which means using resources in that sector which gives the best results and maximum profit to the economy.
Using the degree of operating leverage, the estimated impact on net operating income of a 5 % increase in sales is 6.45%.
The degree of operating leverage (DOL) measures how much a company's operating income varies in response to sales fluctuations.
The DOL ratio assists analysts in determining how changes in sales affect company earnings.
Because a company with high operating leverage has a high proportion of fixed costs, a significant increase in sales can result in significant changes in profits.
If sales increase by 5%, the calculation for increased Net Operating Income is as follows:
Increase in Net Operating Income = Sales Increase x Degree of Operating Leverage
= 5% x 1.29
= 6.45%
Hence, Using the degree of operating leverage, estimated impact on net operating income of a 5 % increase in sales is 6.45%.
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