Answer:
a. Dr Bad Debts Expense $2,700
Cr Allowance for doubtful accounts $2,700
b. $5000
Explanation:
(a) Prepare the adjusting journal entry to record bad debt expense for the year.
Debit Bad Debts Expense [($420,000 x 1%) – $1,500] $2,700
Credit Allowance for doubtful accounts $2,700
(b) If the allowance for doubtful accounts had a debit balance of $800 instead of a credit balance of $1,500, determine the amount to be reported for bad debt expense
Bad debt expense = $4200 + $800 = $5000
1: Một nhà máy khi đầu tư K (đơn vị: nghìn USD), sản phẩm cận biên theo vốn là
Q’(K) = 100K – 1/3
.
Biết rằng với mức đầu tư 8, sản lượng ở mức 4000 đơn vị. Cần đầu tư bao nhiêu để đạt mức sản lượng
8800 đơn vị?
A. 218; B. 212; C. 214; D. 216;
An industry consists of three firms with sales of $355,000, $825,000, and $435,000.
a. Calculate the Herfindahl-Hirschman index (HHI).
Instruction:
Enter your response rounded to the nearest integer.
b. Calculate the four-firm concentration ratio (C4).
c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $355,000 and $435,000
Answer:
Calculating Herfindahl-Hirschman Index and Four-Firm Concentration Ratio:
a. Herfindahl-Hirschman index (HHI) = 3,814
b. The four-firm concentration ratio (C4) = 1
c. If the two firms with sales of $355,000 and $435,000 merged, the resulting HHI would increase by 1,723 to 5,537. The post-merger HHI now exceeds that allowed under the Guidelines (2,500). The increase in HHI is more than that permitted under the Guidelines (200), the merger is likely to be blocked by the Department of Justice.
Explanation:
a) Data and Calculations:
Sales of three firms in an industry:
Sales Industry Share
Firm A sales = $355,000 22% ($355,000/$1,615,000 * 100)
Firm B sales = 825,000 51% ($825,000/$1,615,000 * 100)
Firm C sales = 435,000 27% ($435,000/$1,615,000 * 100)
Total sales = $1,615,000
Herfindahl-Hirschman index (HHI) = 3,814 (22² + 51² + 27²)
Four-firm concentration ratio (C4) = Sales of the four largest firms/Industry sales = $1,615,000/$1,615,000
If the two firms with sales of $355,000 and $435,000 were to merge, the new Herfindahl-Hirschman index (HHI) = 5,537(49² + 51²)
Increase in HHI as a result of the merger = 1,723
Borges Machine Shop, Inc., has a 1-year contract for the production of 225,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow:
General-Purpose Equipment (GPE) Flexible Manufacturing System (FMS) Dedicated Machine (DM)
Annual contracted units 225,000 225,000 225,000
Annual fixed cost $125,000 $225,000 $480,000
Per unit variable cost $15.00 $14.00 $13.00
The option GPE is best when the contracted volume is below:__________
Answer:
For 225,000 units FMS is the best alternative.
For GPE: TC
GPE
[tex]= $100,000 + ($15.00\times 225,000)\\\\= $3,475,000[/tex]
For 0 units GPE has the lowest TC. The next lowest cost is FMS.
x = ($200,000-$100,000)/($15-$14) = 100,000
Therefore, for 0 to 100,000 units GPE is the best alternative.
Explanation:
Formula used:-
For 225,000 units FMS is the best alternative.
Total Cost (TC) = Fixed Cost (FC) + [Variable Cost (VC) x Annual Contract Units (ACU)]
For GPE: TC
GPE
[tex]= $100,000 + ($15.00\times 225,000)\\\\= $3,475,000[/tex]
For FMS: TC
FMS
[tex]= $200,000 + ($14.00\times 225,000)\\\\= $3,350,000[/tex]
For DM: TC
DM
[tex]= $480,000 + ($13.00 \times225,000)\\\\= $3,405,000[/tex]
For 0 units GPE has the lowest TC. The next lowest cost is FMS. Comparing these two plans, let x be the no of units when the cost of both plans is the same.
x = ($200,000-$100,000)/($15-$14) = 100,000
Therefore, for 0 to 100,000 units GPE is the best alternative
Similarly comparing FMS and DM to find x, we get
x= ($ 480,000-$ 200,000)/($14-$13) = 280,000
So, for the 225,000 and 280,000 range, FMS is the best alrernative.
For greater than 280,000 DM is the best alternative.
The option GPE is best when the contracted volume is below 100,000 units
The option FMS is best when the contracted volume is between 100,000 and 280,000 units (enter your response as a whole number)
The option DM is best when the contracted volume is over 280,000 units (enter your response as a whole number)
A large bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag.
Required:
a. Determine the economic order quantity. (Round your final answer to the nearest whole number.) Economic order quantity bags
b. What is the average number of bags on hand? (Round your final answer to the nearest whole number.) Average number of bags
c. How many orders per year will there be? (Round your final answer to the nearest whole number.) Number of orders per year
d. Compute the total cost of ordering and carrying flour.
Answer and Explanation:
The computation is shown below
a. The economic order quantity is
= sqrt ((2 × annual demand × ordering cost) ÷ carrying cost)
= sqrt ((2 × 1,215 × $10) ÷ $75)
= 18 units
b) Average number of bags on hand is
= EOQ ÷ 2
= 18 ÷ 2
= 9
c) Orders per year is
= D ÷ EOQ
= 1215 ÷ 18
= 67.5
= 68
d) Total cost = Total carrying cost+ Total ordering cost
= (Q ÷ 2)H +(D ÷ Q)S
= (18 ÷ 2)75 + (1215 ÷ 18) × 10
= 675 + 675
= $1350
On November 1, 2010, Salem Corporation sold land priced at $900,000 in exchange for a 6%, six-month note receivable. As a result of this sale of land, what will Salem's Balance Sheet on December 31, 2010 include
Answer:
Note receivables of $900,000 & Interest receivable of $9,000
Explanation:
As a result of this sale of land, what will Salem's Balance Sheet on December 31, 2010 include?
Interest receivable = $900,000*6%*2/12
Interest receivable = $900,000 * 0.01
Interest receivable = $9,000
So, Salem's Balance Sheet on December 31, 2010 will include Note receivables of $900,000 and Interest receivable of $9,000.
The government of Velovia made progress in its efforts to bring rapid inflation under control. Although prices are still rising, the rate of increase has slowed considerably. This suggests that Velovia is experiencing disinflation.
a. True
b. False
Answer:
a. True
Explanation:
At the time when the velvovia government made the efforts in its progress in order to control the increased inflation but at the same time the price is also still increasing but the increase rate would be falled down so here it is recommended that the velovia experienced the disinflation where the inflation is considerably slowing and the rate of inflation is also slow down
Therefore the given statement is true
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $500,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table and calculate your final answer using the formula and financial calculator methods.
Earnings before Depreciation
Year 1 $160,000
Year 2 215,000
Year 3 125,000
Year 4 89,000
Year 5 78,000
Year 6 44,000
The firm is in a 20 percent tax bracket and has a 12 percent cost of capital. Calculate the net present value.
Explanation:
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Answer:
to the end of the sixth year;
b/ The number of years required before the capital stock exceeds $200 000.
1 1.1 Briefly name and explain the aspects of the marking mix.
Answer: Marketing mix could described as methods taken by an organization to boast their brand or improve demand of product in the market.
Explanation:
Marketing mix could described as methods taken by an organization to boast their brand or improve demand of product in the market.
Aspects of marketing mix are Price, product, promotion and place.
Price; this refers to the value of a product. The organization in considering marketing mix would have to make her price affordable for the market in relation with the value of the product it's selling.
Product; this is the item being sold. The item must be valuable and worth the buy of the customers, this would improve consistent buying and referral by those who have already bought.
Promotion: this refers to actions taken to make known the product visibility in the market. This actions could be through branding, marketing with the aim of making the products demanded more than usual always.
Place: these is referred to as the target market. Every market is not a market, the place refers to those who are either already customers or would be customers. The organization must try to identify those who her products address and try selling to them.
Jefferson tutoring had the following payroll information on Feb 28:
Gross pay: 4,000
Cumulative earnings prior to this payroll: 4,000
Assume:
FICA tax rates are OASDI 6.2% on a limit of 117,000 and medicare 1.45%.
State unemployment tax rate is 2% on the first 7,000.
Federal unemployment tax rate is 0.8% on the first 7,000
Using the information above the journal entry to record the payroll tax expense for jefferson tutoring would include:____.
A. a credit to FUTA payable for 24.
B. a debit to payroll tax expense in the amount of 390.
C. a credit to SUTA payable for 60.
D. all of the above.
Answer: D. all of the above.
Explanation:
FUTA:
Cumulative earnings were $4,000. FUTA is one the first $7,000 which means that only $3,000 is left to be taxed on account of the cumulative earnings prior to this payroll having been taxed:
= 0.8% * 3,000
= $24
This will be credited to FUTA Payable to recognize that Jefferson owes this liability.
SUTA:
Same goes for SUTA:
= 2% * 3,000
= $60
This will be credited to SUTA Payable to recognize that Jefferson owes this liability.
Payroll tax expense:
= FICA taxes + Medicare + FUTA + SUTA
= ((6.2% + 1.45%) * 4,000) + 24 + 60
= $390
This will be debited to Payroll Tax expense because expenses are debited when they increase.
Verslas is a firm operating in a monopolistically competitive market. It is currently maximizing profit with an output of 1,200 units and a price of $5. Based on this information, which of the following statements must be true?
a. Verslas could not sell more units by lowering its price.
b. Verslas is earning normal profit.
c. Verslas is earning $3,600 in profit.
d. Verslas has a marginal revenue less than $5.
e. Verslas has a marginal revenue greater than $5.
Answer:
b
Explanation:
A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopolistic competition has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.
An example of monopolistic competition are restaurants
When firms are earning positive economic profit, in the long run, firms enter into the industry. This drives economic profit to zero
If firms are earning negative economic profit, in the long run, firms leave the industry. This drives economic profit to zero
in the long run, only normal profit is earned
If Verslas is producing at a profit maximising point, it means that marginal revenue equal marginal revenue and the firm is earning a normal profit
Kite Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.
Sales (3,000 units) $ 180,000
Variable expenses 108,000
Contribution margin 72,000
Fixed expenses 62,400
Net operating income $ 9,600
The contribution margin ratio is closest to:______.
a. 33%
b. 40%
c. 60%
d. 67%
Answer:
b. 40%
Explanation:
Contribution margin ratio = Contribution / Sales x 100
where,
Contribution = Sales - Variable Costs
= $180,000 - 108,000
= $72,000
therefore,
Contribution margin ratio = $72,000/ $180,000 x 100
= 40 %
thus,
The contribution margin ratio is closest to 40 %.
please someone should help me.....how do we solve the square root of x +8 plus the square root of x+1 equals 7.....note the question is a surd question
The solution to the surd equation here is x = 449/49
How to solve for the value of the surd[tex]\sqrt{x+8} +\sqrt{x-1} = 7[/tex]
We have to isolate the surds
[tex]\sqrt{x+8} =\sqrt{x-1} +7[/tex]
Square the both sides of the equation
x+8 = x-1+49-14√x-1
Separate the equations on the left and the right hand side
14√x-1 = -x-8+x-1+49
Rearrange the equation
14√x-1 = 40
square the both sides of the equation such that
196x -1796 = 0
Divide through by 196
x = 1796/196
x = 449/49
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During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $229,134 instead of the correct amount of $165,639. The effect on the balance sheet and income statement would be
Answer:
Assets will be overstated and Net Income understated
Explanation:
The effect on the balance sheet and income statement
Balance Sheet :
Inventory will be overstated
Inventory belongs to the Current Asset group
Meaning Assets will be overstated
Income Statement :
Inventory will be overstated
This reduces cost of sales with an amount greater
Meaning Profits will be overstated
Conclusion
The effect on the balance sheet and income statement would be : Assets will be overstated and Net Income understated.
A tremendous flood along the Mississippi River destroys thousands of factories, reducing the nation's capital stock by 5%. What happens to current employment and the real wage rate
Answer:
Both employment and the real wage rate would decrease
Explanation:
Given that the capital stock of a nation or country jas a direct impact on such country in terms of savings and investments which directly translates to additional.economic development.
Hence, in this case, when a tremendous flood along the Mississippi River destroys thousands of factories, reducing the nation's capital stock by 5%. What happens to current employment and the real wage rate is that "Both employment and the real wage rate would decrease"
This because there won't be adequate money available to create more employment. And with lease employment opportunities than the available labor, the real wage rate tends to decrease over time.
Explain 2 reasons why businesses create business plan?
Pina Colada Corp. has the following transactions during August of the current year.
Aug. 1 Issues shares of common stock to investors in exchange for $10,880.
4 Pays insurance in advance for 3 months, $1,500.
16 Receives $880 from clients for services rendered.
27 Pays the secretary $680 salary.
Required:
Indicate the basic analysis and the debit-credit analysis.
Answer and Explanation:
The indication of the basic analysis and the debit credit analysis is as follows;
Date Basic Analysis Debit - Credit Analysis
Aug. 1 The asset Cash is increased; Debits increase assets;
the stockholders' equity account Debit Cash
Common stock is increased. $10,880
Credits increase stockholders' equity
Credit Common stock
$10,880
Aug. 4 The asset Prepaid Insurance Debits increase assets;
is increased; Debit Prepaid Insurance
the asset Cash is decreased. $ 1,500
Credits decrease assets;
Credit Cash
$ 1,500
Aug. 16 The asset Cash is increased; Debits increase assets;
the revenue Service revenue Debit Cash
is increased. $880
Credits increase revenues:
Credit Service revenue
$880
Aug. 27 The expense Salaries expense Debits increase expenses:
is increased; Debit Salaries expense
the asset Cash is decreased. $680.
Credits decrease assets:
Credit Cash
$680
Oi boa tarde , onde consigo um curso online de aprimoramento de laticinios
Explanation:
aqui neste APP...............
A company projects an increase in net income of $108000 each year for the next five years if it invests $900000 in new equipment. The equipment has a 5-year life and an estimated salvage value of $300000. What is the annual rate of return on this investment?
a. 20.5%
b. 31.0%
c. 30.0%
d. 30.8%
Answer:
18 %
Explanation:
Annual rate of return on this investment = annual profit / average investment x 100
where,
annual profit = $108000
average investment = (initial cost + salvage value) ÷ 2
= ($900000 + $300000) ÷ 2
= $600,000
therefore,
annual rate of return on this investment = $108000 / $600,000 x 100
= 18 %
RST Company produces a product that has a variable cost of $6 per unit. The company's fixed costs are $30,000. The product sells for $10 per unit. The break-even point in sales dollars is $_____________.
Answer: $75000
Explanation:
In order to solve the question, firstly we need to calculate the contribution margin ratio which will be:
= ($10 - $6) / $10
= 40%
Then, the break even sales will then be:
= Fixed cost / Contribution margin ratio
= $30000 / 40%
= $75000
Therefore, the break-even point in sales dollars is $75000
The ratio of shareholders funds to total assets of the company is called?
Answer:
share holder equity
Explanation:
it indicates how much of company's assets have been generated
What are derivatives? Different types of derivatives ? What are Forward contracts ?
What are Futures contracts ? Features and benefits of derivatives ?
Explanation:
The most common types of derivatives are forwards, futures, options, and swaps. The most common underlying assets include commodities, stocks, bonds, interest rates, and currencies. Derivatives allow investors to earn large returns from small movements in the underlying asset's price.
In the market for wheat, if the price of ethanol (which is made from corn, a substitute in the production process) increased dramatically, the _____ wheat would _____.
a. demand for; increase.
b. supply of; decrease.
c. demand for; decrease.
d. supply of; increase.
Answer:
I think C.
Explanation:
Please correct me if wrong and if right, give brainliest plz?
Westmoreland Company Following are selected data from Westmoreland Company's financial statements.
2018 2017
Current liabilities $230,000 $160,000
Long-term debt 120,000 320,000
Stockholders' equity 420,000 540,000
Cash payments for additions to plant and equipment 45,000 32,000
Net cash flow from operating activities 80,000 51,000
Interest and principal payments 12,000 8,000
Net operating cash flows before interest and taxes 68,000 43,000
Net income 90,000 72,000
Interest expense 8,500 11,500
Income taxes 16,000 14,500
Dividends paid 15,000 30,000
Refer to the Westmoreland Company data.
The company's times interest earned ratio for 2018
a. Indicates the company cannot meet its current year interest payments out of current year earnings.
b. Shows an increase in the company's ability to pay its current debt when it comes due.
c. Decreased, which indicates the company has more cash to pay interest on its debt.
d. Increased, which indicates the company's lenders will be pleased.
Which of the following statements is true regarding valuation amounts on the balance sheet?
1. Assets are recorded at current cost.
2. Stockholders' equity reflects the current market value of the stock.
3. A variety of assumptions are used in determining amounts reported on the balance sheet.
4. Stockholders' equity reflects the amount the stockholders would receive upon liquidation.
Answer:
Westmoreland Company
1. The company's times interest earned ratio for 2018
d. Increased, which indicates the company's lenders will be pleased.
2. The TRUE statement regarding valuation amounts on the balance sheet is:
3. A variety of assumptions are used in determining amounts reported on the balance sheet.
Explanation:
a) Data and Calculations:
Westmoreland Company
Selected financial statements data.
2018 2017
Current liabilities $230,000 $160,000
Long-term debt 120,000 320,000
Stockholders' equity 420,000 540,000
2018 2017
Cash payments for additions
to plant and equipment 45,000 32,000
Net cash flow from operating activities 80,000 51,000
Interest and principal payments 12,000 8,000
Net operating cash flows before
interest and taxes 68,000 43,000
Net income 90,000 72,000
Interest expense 8,500 11,500
Income taxes 16,000 14,500
EBIT $114,500 $98,000
Dividends paid 15,000 30,000
Time interest earned (TIE) for 2018 =EBIT/ Interest Expense
= $114,500/$8,500
13.47x
TIE for 2017 = $98,000/$11,500
= 8.52x
. Alternative A has a first cost of $20,000, an operating cost of $9,000 per year, and a $5,000 salvage value after 5 years. Alternative B will cost $35,000 with an operating cost of $4,000 per year and a salvage value of $7,000 after 5 years. At an MARR of 12% per year, which should be selected
Answer and Explanation:
The computation is shown below:
NPW of X is
= -$20,000 - $9,000 × (P/A,12%,5) + $5,000 × (P/F,12%,5)
= -$20,000 - $9,000 × 3.604776 + $5,000 × 0.567427
= -$49,605.85
And,
NPW of Y is
= -$35,000 - $4,000 × (P/A,12%,5) + $7,000 × (P/F,12%,5)
= -$35,000 - $4,000 × 3.604776 + $7,000 × 0.567427
= -$45,447.11
Based on the above calculations as we can see that net present cost of Y is lower than the net present cost of X so Y should be selected
Your credibility is your capability of being believed because you are reliable and worthy of confidence.
yes, agreed and proven.
Accountants focus on creating financial statements, whereas finance professionals use these statements to evaluate a firm and answer questions about its performance. Indicate which financial statement you would refer to when answering the questions in the following table:
Income Statement Statement of Retained Earnings
How profitable has the firm been?
How much of the firm's earnings are left as balance after the firm pays out dividends to its shareholders?
If compensation for senior management is based on short-term performance of the firm, in the short run the firm is likely to:
a. Overstate its earnings
b. Understate its earnings
Answer:
1. Indication of financial statement to refer to when answering questions in the following table:
Question Financial Statement
How profitable has the firm been? Income Statement
How much of the firm's earnings are Statement of Retained Earnings
left as balance after the firm pays out
dividends to its shareholders?
2. If compensation for senior management is based on short-term performance of the firm, in the short run the firm is likely to:
a. Overstate its earnings
Explanation:
Company A's Income Statement shows its profit performance at different levels. At one level is the gross profit, which shows the difference between the net sales or service revenue and the cost of sales/service. At another level is the operating income, which is the income before interest and taxes. The next important level is the net income, which is the profit after taxes. This shows the earnings available for distribution to stockholders. The Statement of Cash Flows classifies the cash flows generated into operating, investing, and financing activities, and shows the non-cash flow adjustments.
On January 1, 2019, Sunland Company granted Sam Wine, an employee, an option to buy 1,000 shares of Sunland Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $5520. Wine exercised his option on October 1, 2021 and sold his 1,000 shares on December 1, 2021. Quoted market prices of Sunland Co. stock in 2021 were:
Using the fair value method, Sunland Company should recognize compensation expenses for 2019on its books in the amount of 2019 is $5,520.
What is a compensation expense?Compensation expenses are compensation-associated expenses used as a reward for exceptional job performance.
Examples of such compensation expense plans include bonuses, commissions, stock options, and profit-sharing.
Data and Calculations:Number of option shares granted = 1,000 shares
Grant price = $30
Exercise period = 5 years
Total compensation expense based on the fair value option pricing model = $5,520
The 2019 compensation expense = $6,000 ($30 x 1,000)/5
Question Completion:Quoted market prices of Sunland Co. stock in 2021 were:
July 1 = $30 per share
Oct 1 = $36 per share
Dec 1 = $40 per share
Required:
As a result of the option granted to Wine, using the fair value method, Sunland Company should recognize compensation expenses for 2019 on its books in the amount of 2019.
Thus, the 2019 compensation expense is $5,520.
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You manage an equity fund with an expected risk premium of 13% and a standard deviation of 44%. The rate on Treasury bills is 6.6%. Your client chooses to invest $90,000 of her portfolio in your equity fund and $60,000 in a T-bill money market fund. What is the expected return and standard deviation of return on your client’s portfolio? (Round your answers to 2 decimal places.)
Answer and Explanation:
The computation of the expected return and the standard deviation is given below:
the expected return is
= $90,000 × 13% + $60,000 × 6.6%
= $15,660.00
And,
standard deviation of return is
= $90,000 × 13% × 44% + $60,000 × 6.6%
= $5,148 + $3,960
= $9,108.00
In this way it should be calculated
Identify the financial instruments based on the following descriptions.
a. Backed by the US government, these financial instruments are fixed-rate debt securities with a maturity of more than one year. They are considered default free but are subject to interest rate risk.
b. Issued by corporations, these unsecured debt instruments are used to fund corporate short-term financing requirements. If issued by a financially strong company, they have less risk.
c. These financial instruments are investment pools that buy such short-term debt instruments as Treasury bills (T-bills), certificates Of deposit (CDs), and commercial paper. They can be easily liquidated.
d. These financial instruments are contractual agreements that give one party a long-term agreement to use an asset by providing regular payments.
Answer:
The solution to the given point can be defined as follows:
Explanation:
For point a:
TREASURY NOTE: For further than a year, Treasury notes were issued for the federal reserves.
For point b:
COMMERCIAL PAPER: Brief securities mostly on corporate debt Sar financial markets.
For point c:
MONEY MARKET MUTUAL FUND: In short-term assets, the Financial Market Fund invests.
For point d:
PREFERENCE SHARES: Preferred shareholders are much more divergent than owners, and less than the shareholders were dealt with.
A rules-based monetary policy :_______.a. is advocated by activists. b. is advocated by nonactivists. c. could involve a predetermined steady growth rate in the money supply. d. b and c e. all of the above
Answer:
d. b and c
Explanation:
Monetary policy can be defined as the actions (macroeconomic policies) adopted and undertaken by the central bank of a particular country (Federal Reserve System in the United States of America) to control the money supply and interest rates so as to boost or enhance economic growth.
Basically, monetary policies are used by the central bank to manage inflation, economic growth through long-term interest rates and level of unemployment in a country. In order to boost economic growth, the national government through its central bank introduces monetary policy to increase money supply (liquidity). Also, a monetary policy can be used to prevent inflation through the reduction of money supply at a given period of time.
A rules-based monetary policy is advocated by non-activists and when it's adopted by the central bank of a country, it could involve a predetermined steady growth rate in the money supply because it's implemented based on specific indicator events existing in the economy.
