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Hunter-Best [27]
2 years ago
11

6. The effects of inflation Suppose Friendly Airlines is considering signing a long-term contract with the union representing it

s pilots. Friendly Airlines and the union both agree that real wages should increase by 3%. Inflation is expected to be 6%, so they agree on a 9% nominal wage increase. Now, suppose inflation turns out to be lower than expected, coming in at 5%. This would the union and Friendly Airlines because the real wage increase would now be .
Business
1 answer:
Alla [95]2 years ago
8 0

If inflation is lower than expected, it would benefit the union and it would be a disadvantage to Friendly Airlines because the real wage increase would now be 4%.

<h3>What is inflation?</h3>

Inflation is when there is a general increase in the general price level of an economy. If inflation turns out to be lower than expected, the employers would be at a disadvantage while the employees would be at advantage because there would be an increase in their real wages.

Increase in real wage = real increase in wage + (expected inflation + actual inflation)

3% + (6% - 5%) = 4%

To learn more about inflation, please check: brainly.com/question/15692461

#SPJ1

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) ________ are likely a fixed cost of a firm. A) Wages paid to employees B) The payments for supplies C) Lease payments for offi
aev [14]

Answer:

C) Lease payments for office space

Explanation:

The fixed cost is the cost that remains fixed whether the production level changes or not

So as per the given choices, the option c would be selected i.e. lease payment made for office space as it would be independent with respect to the quantity generated also it would be paid even there is no production take place

Therefore the option c is correct

7 0
3 years ago
A glass company making windows for houses also makes windows for other things (cars, boats, planes, etc.). We would expect its s
Kryger [21]

Answer:

C) Relatively more elastic than those of firms which only make house windows

Explanation:

The supply curve for this company will be more elastic than the supply curves of its competition because it can decide to produce either house windows or other types of windows depending on which product generates the largest profit. For example, if the price of car windows increases, then the company's supply of car windows will increase.

6 0
3 years ago
a country that can sell its products at a lower cost because it has lower standards for emissions from manufacturing facilities
MA_775_DIABLO [31]

A country that can sell its products at a lower cost because it has lower standards for emissions from manufacturing facilities is making use of predatory dumping .

What Is Predatory Dumping?

  • A form of anti-competitive behavior known as predatory dumping involves a foreign corporation underpricing its goods in an effort to stifle domestic competition.
  • The corporation may eventually establish a monopoly in its chosen market by outpricing competitors.

What is an example of predatory dumping?

  • Predatory dumping is regarded as a dishonest commercial practice. When a business is completely informed of its actions and goals, it happens.
  • A glaring example is the onslaught of Chinese goods entering numerous international markets via physical storefronts, online, and marketplaces like E - Commerce company .

Learn more about predatory dumping

brainly.com/question/15288162

#SPJ4

4 0
1 year ago
Moody Farms just paid a dividend of $2.65 on its stock. The growth rate in dividends is expected to be a constant 3.8 percent pe
NISA [10]

Answer:

$34.63.

Explanation:

The Gordon Dividend Discount Model will be used to calculate the current share price. This model helps us to determine how much should we pay for a stock and the analysis is based on dividends, growth rate, and our required rate of return. The model is as follows:

Po = D1 / (1 + r )^1 + D2 / (1 + r )^2 + D3 / (1 + r )^3 + D4 / (1 + r )^4 + D5 / (1 + r )^5 + D6 / (1 + r )^6 + [(D7 / r - g) / (1 + r)^6]

where

Po = Current market Price

D1 = Dividend Paid * (1 + g)

D2 = D1 (1 + g) ; D3 = D2 (1 + g) ; D4 = D3 (1 + g) ; D5 = D4 (1 + g)  

D6 = D5 (1 + g) ; D7 = D6 (1 + g)

This implies that:

Po = 2.7507 / (1.15)^1 + 2.8552 / (1.15)^2 + 2.9637 / (1.15)^3 + 3.0763 / (1.13)^4 + 3.1932 / (1.13)^5 + 3.3146 / (1.13)^6 + [(3.4405/.11 - .038) / (1.13)^6]

⇒ Current Market Price = $34.63.

Note: Figures are rounded up-to 4 decimal points. A difference of up-to $2 would not affect your scores as far as the methodology is correct.

8 0
3 years ago
A Treasury bill has a face value of 100K, 119 days to maturity, and is selling for $90 thousand. What is the effective annual yi
Dennis_Churaev [7]

Answer:

Annual Yield = 34.08%

Explanation:

A treasury is a short-term financial instrument issued by a government with a maturity date of 365 days or less. It is issued for a value less than the its face value., therefore it is a discounted instrument.The face value is the amount that the investor will receive at the maturity of the bill.

To calculate the the effective annual yield of a bond; follow the steps below:

Step 1: Calculate the return earned for the investment period. This called the yield for the investment period. Note that the investment may be for less than 365 days depending on the number of days left to maturity when it was purchased.  

(Face Value - Price)/Price × 100

= ((100-90)/90)× 100= 11.%

This helps to ascertained the return earned as a percentage of the amount invested.

Step 2: Calculate the annual effective rate. This is required to determine the equivalent return (yield) per annum should the investment be made for one year.

Annualized Yield=  (Yield/Time period to maturity) × 365

                               = (11.11%/119) × 365

                                  = 34.08%

5 0
3 years ago
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