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inna [77]
2 years ago
9

Investment depends on the ______ interest rate, and money demand depends on the ______ interest rate. a. real; real b. nominal;

nominal c. real; nominal d. nominal; real
Business
1 answer:
ivolga24 [154]2 years ago
6 0

The correct option is C.

<h3>What are investments?</h3>

Investment is a broad term used to refer to any asset or item(s) that are acquired with the sole aim of generating profit. These investments often take various forms such as

  • Shares investments
  • Property investments
  • Cash investments
  • Fixed interest investments.

Typically these investments depend on the real interest rate, and money demand depends on the nominal interest rate.

You can learn more about nominal and real interest rates here brainly.com/question/13324776

#SPJ1

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Which of the following statements is CORRECT? a. Other things held constant, an increase in the debt ratio will result in an inc
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Answer:

E. Suppose a firm's total assets turnover ratio falls from 10% to 9%, but at the same time its profit margin rises from 9% to 10% and its debt increases from 40% of total assets to 60%. Under these conditions, the ROE will increase.

3 0
3 years ago
Which of the following are the fixed costs relative to the number of the units produced and sold? a. straight-line depreciation,
ollegr [7]

Answer:

The correct answers are letters "A", "B", and "C": straight-line depreciation, manager's salary, store rent.

Explanation:

Fixed Costs are business expenses that do not change as the level of production goes up or down. They are one of two types of business expenses the other being variable cost. Variable costs do change as the volume of production changes. Examples of fixed costs are high-executive salaries, rent, depreciation, and insurance. Examples of variables costs are commissions, raw materials, and transportation fees.

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2 years ago
Suppose that the government imposes a commodity tax on alcohol. Assuming that both alcohol demand and supply are relatively elas
belka [17]

Answer:

c. Alcohol consumption decreases, whereas the alcohol market price increases if the tax is placed on the sellers or decreases if the tax is placed on the buyers.

Explanation:

Elastic demand is the situation that when the price of a good goes up the quantity demanded reduces. Since alcohol demand and supply are both elastic, If commodity tax is imposed on sellers then they decrease the supply and increase the price of alcohol. The increased price of alcohol will make buyers buy less of alcohol thereby reducing the consumption of alcohol.

6 0
3 years ago
Horford Co. has no debt. Its cost of capital is 8.9 percent. Suppose the company
blsea [12.9K]

Answer:

A. 12.1%

B. 8.9%

Explanation:

a. Calculation for What is the company's new cost of equity

Using this formula

New cost of equity=Cost of capital+[(Cost of capital- Debt interest rate ) *(Debt-equity ratio)*(1)]

Let plug in the formula

New cost of equity=[0.089+[(0.089-0.057)*(1)*1]

New cost of equity=[0.089+0.032*(1)*1]

New cost of equity=[0.121*(1)*1]

New cost of equity=0.121*100

New cost of equity=12.1%

Therefore the company's new cost of equity will be 12.1%

b. Calculation for What is its new WACC

Particular Weight Cost Weighted cost

Equity 0.5000 *12.1% = 0.0605

Debt 0.5000 * 5.7% =0.0285

WACC =0.089*100

WACC =8.9%

(0.0605+0.0285)

Therefore the new WACC will be 8.9%

4 0
2 years ago
Name any TWO markets within the four-sector circular flow model​
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Answer:

The circular flow model shows the interaction between two groups of economic decision-makers―households and businesses―and two types of economic markets―the market for resources and the market for goods and services.

4 0
2 years ago
Read 2 more answers
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