1. Print More Money.
This may be effective in case the central bank wank to raise the amount of money in circulation. Its only applicable if there is shortage of money in the economy.
2. Set the Reserve Requirement.
In this case the government set a mandatory net deposit that you need to reserve aside the net transaction. For example they set the minimum amount that each bank is suppose to deposit,without this the loan or withdrawal is restricted.
3. Influence Interest Rates.
The central bank influences the rate of interest indirectly by the use of commercial bank. By raising the interest rate for loan,,you discourages peoples from borrowing money and thus reducing the money in circulation.
4. Engage in Open Market Operations.
This is where by the central bank sell or buy government securities through a process called open markets. When the aim is to increase the amount of money in circulation ,they purchase from commercial bank the government securities thus giving them money as result they have more money to give loans.
5. Introduce a Quantitative Easing Program
This is more advanced. The central bank makes money to buy government securities such as bonds etc. Thus money enters into the banks triggering them to give more loans.
Kelvin kinuthia answered the question on May 10, 2019 at 17:13
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The following information was extracted from books of Chunga Traders for the period ending
31/12/2000:-
Fixed assets – 350,000
Drawings – 50,000
Creditors – 50,000
Cash – 60,000
Discount received 4,000
Rent...
(Solved)
The following information was extracted from books of Chunga Traders for the period ending
31/12/2000:-
Fixed assets – 350,000
Drawings – 50,000
Creditors – 50,000
Cash – 60,000
Discount received 4,000
Rent – 12,000
Bank overdraft – 10,000
Debtors – 20,000
Stock (31/12/2000)-30,000
Commission received – 6,000
Gross profit – 80,000
Electricity – 3,000
Stock (11/1/2000) – 50,000
Salaries – 20,000
Prepare:- Their profit & loss account
Date posted:
April 4, 2019
.
Answers (1)
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The following balance sheet was prepared by the accounts clerk of Mapato traders:-
Requirements:
Calculate the following
i) Working capital
ii) Return on capital
iii) Current ratio
iv) Capital employed
v) Borrowed...
(Solved)
The following balance sheet was prepared by the accounts clerk of Mapato traders:-
Requirements:
Calculate the following
i) Working capital
ii) Return on capital
iii) Current ratio
iv) Capital employed
v) Borrowed capital
Date posted:
April 4, 2019
.
Answers (1)
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The following trial balance was extracted from Vumilia traders as 31st December 2006
Additional information:
-closing stock 25,000
-Outstanding salaries 450
-Insurance 900 has been paid in advance
-Depreciate machinery...
(Solved)
The following trial balance was extracted from Vumilia traders as 31st December 2006
Additional information:
-closing stock 25,000
-Outstanding salaries 450
-Insurance 900 has been paid in advance
-Depreciate machinery by 10% on cost
Required: i) trading, profit and loss a/c
ii) Balance sheet
Date posted:
April 4, 2019
.
Answers (1)
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Journalize the following transactions which took place in the business of W. Wanjala during
the month of June 2009:-
June 1 Balance B/f...
(Solved)
Journalize the following transactions which took place in the business of W. Wanjala during
the month of June 2009:-
June 1 Balance B/f from May 2009 were:-
Office furniture shs.50,000 and motor vehicle shs.100,000
June 2 Purchased office furniture on credit for shs.65,000 from Mwema furniture
June 10 Sold an old vehicle on credit to Omwami garage for shs.200,000
June 25. Discovered that a motor vehicle that had been bought on credit from
Kanyere motor for Kshs.750,000, had been recorded in purchases account
June 28 Sold an old computer to classic academy on credit for ksh. 15,000
June 29 : Sold an old tractor whose book value is Kshs. 200,000 for Khs.250,000
to Goseta
Date posted:
April 4, 2019
.
Answers (1)
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A petty cashier of Mugirango traders operates his petty cash book on an imprest system
of sh. 2500. On I February 2009, he had cash in...
(Solved)
A petty cashier of Mugirango traders operates his petty cash book on an imprest system
of sh. 2500. On I February 2009, he had cash in hand of Sh. 500 and was reimbursed the
difference by the main cashier to restore his cash float. The following transactions took
place during the same month of February 2009:
Feb 2nd paid taxi fare sh.150 and wages sh250
4th Bought five reams of paper for sh25 each and stamps for sh.30
7th Paid wages sh.250 and bought envelopes for sh.40
20th Bought tea for staff sh.70 and paid for water bills sh.56
28th Paid for electricity sh.80 and stamps sh.40
Required: Prepare a petty cash book using the following analysis columns;
- Wages
- Traveling
- Stationery
- Postage
- Miscellaneous
Date posted:
April 4, 2019
.
Answers (1)
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The following transactions relate to Furaha traders for the month of July,2008
July 1 : Balance brought down cash sh.16,250 and Bank...
(Solved)
The following transactions relate to Furaha traders for the month of July,2008
July 1 : Balance brought down cash sh.16,250 and Bank Shs.19,847
July2 : Sold goods worth Shs.1,348 to Patel and received a calculator in exchange
July 5 : Paid transport by cheque Shs.2,000
July 6 : Issued a cheque to Kerio Traders setting an invoice for Shs.10,000 deducting 2%
cash discount
July 10: Transfer Shs.15 000 from cash till to bank
July 12: Sold goods for cash Shs.12,000 less 2% cash discount
July 13: Sold goods to Onyango on credit worth Shs.15, 000
July 14: The owner of the business withdrew Shs.3000 in cash to buy a present for his
daughter
July 16 : Received a cheque from Kuria Shs.2,500 less 5 % cash discount
July 22 : Bought furniture from Babu Traders on credit worth Shs.16,500 and cash
discount of 10% if payment is made within 2 weeks
July 24: Withdrew cash from bank for office use Shs8,000
July 26: The owner brought into the business Shs.9,000 cash
July 27: Issued a cheque to Babu Traders for amount due
July 28: Sold goods to Kuria worth Shs.5,000 for Shs.3,800 and received payment by
cheque
July 30: Banked all cash and remained with Shs.100 in the cash till
Required; Prepare Furaha Traders three column cash book for the month of July, 2008
Date posted:
April 4, 2019
.
Answers (1)
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The following information relates to Ndhiwa resort traders for the month of November 2009:-
November, 1.started a business with shs 160,000 cash
...
(Solved)
The following information relates to Ndhiwa resort traders for the month of November 2009:-
November, 1.started a business with shs 160,000 cash
2. Purchases shs.120,000
3. Made sales in cash shs.126,000
4. Paid for electricity shs.1000 in cash
5. Received rent of shs.37 500 in cash
6. Gave discount of shs.6,000 in cash
Required :- i) Post the above information in the relevant ledger accounts and balance them off
ii) Extract a trial balance
Date posted:
April 4, 2019
.
Answers (1)
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Record the following transactions in the relevant ledger accounts, balance the account
and extract a trial balance
Date ...
(Solved)
Record the following transactions in the relevant ledger accounts, balance the account
and extract a trial balance
Date Transaction
1/4/2007 Mary started business with shs.80,000 cash
2/4/2007 Bought stationery for shs.4,000 and paid in cash
3/4/2007 Opened a bank account and deposited shs.50,000 from the cash till
4/420007 Bought motor vehicle worth shs.250,000 from Lucy motors on credit
5/4/2007 Bought postage stamps for shs.60 in cash
Date posted:
April 4, 2019
.
Answers (1)
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A manufacturer exhibited his goods in a local trade fair. However, his sales didn’t increase
significantly thereafter. Outline five reasons that may have led to lack...
(Solved)
A manufacturer exhibited his goods in a local trade fair. However, his sales didn’t increase
significantly thereafter. Outline five reasons that may have led to lack of significant sales
increase
Date posted:
April 4, 2019
.
Answers (1)
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Jogoo business enterprise has been using salesmen to market their products. Highlight
five benefits of this strategy to the company
(Solved)
Jogoo business enterprise has been using salesmen to market their products. Highlight
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Date posted:
April 4, 2019
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Answers (1)
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Highlight five circumstances under which persuasive advertising may be used
(Solved)
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Date posted:
April 4, 2019
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Answers (1)
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Highlight five benefits that a firm gets from the use of customers care services as part
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(Solved)
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Date posted:
April 4, 2019
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Outline five disadvantages of sirens as a form of communication that is popular with
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(Solved)
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Date posted:
April 4, 2019
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(Solved)
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Date posted:
April 4, 2019
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Date posted:
April 4, 2019
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(Solved)
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Date posted:
April 4, 2019
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Date posted:
April 4, 2019
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Date posted:
April 4, 2019
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(Solved)
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Date posted:
April 4, 2019
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(Solved)
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Date posted:
April 4, 2019
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Answers (1)