Suppose that people hold no currency, the ratio of reserves to deposits is 0.1, and that the demand for money is given by the following:

Md = Y (.8 − 4i)

where Y is income and i is the interest rate. Initially, the monetary base is $100 billion and nominal income is $5 trillion.

1.What is the demand for central bank money?
2.Find the equilibrium interest rate by setting the demand for central bank money equal to the supply of central bank money.
3.What is the overall supply of money? Is it equal to the overall demand for money at the interest rate you found in part b?
4.What is the impact on the interest rate if central bank money is increased to $300 billion?
5.If the overall money supply increases to $3,000 billion, what will be the impact on i?

Chance company had two operating divisions, one manufacturing farm equipment and the other office supplies. both divisions are considered separate components as defined by generally accepted accounting principles. the farm equipment component had been unprofitable, and on september 1, 2018, the company adopted a plan to sell the assets of the division. the actual sale was completed on december 15, 2018, at a price of $600,000. the book value of the division’s assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale. the division incurred a before-tax operating loss from operations of $130,000 from the beginning of the year through december 15. the income tax rate is 40%. chance’s after-tax income from its continuing operations is $350,000. required: prepare an income statement for 2018 beginning with income from continuing operations. include appropriate eps disclosures assuming that 100,000 shares of common stock were outstanding throughout the year. (amounts to be deducted should be indicated with a minus sign. round eps answers to 2 decimal places.)

The larger the investment you make, the easier it will be to: get money from other sources. guarantee cash flow. buy insurance. streamline your products.

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