Answer:
the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected.
Explanation:
A political business cycle can be defined as a business cycle that typically arises from the manipulation and tweaking of economic policy tools such as fiscal policy and monetary policy by incumbent (serving) politicians, in order to stimulate and enhance the economy of a particular country before an election. Thus, this would go a long way to boost the chances of the candidate representing the particular political party and reelection into office by the people.
Hence, the political business cycle refers to the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected.
The Gross Domestic Products (GDP) is a measure of the total market value of all finished goods and services made within a country during a specific period.
Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country.
Basically, the four (4) major expenditure categories of GDP are consumption (C), investment (I), government purchases (G), and net exports (N).
Additionally, Gross Domestic Products (GDP) of a country's economy gives an insight to it's social well-being such as Real GDP.
The increase in US interest rates relative to the British interest rate would cause the Swiss demand for dollars to increase and the dollar will appreciate against the Swiss franc.
<h3>Why would the demand for dollars increase and the dollar appreciate?</h3>
When the interest rates of the US increases relative to that of the Britain, investors would earn a higher rate of return relative to that of Britain. As a result, investors would prefer to invest in the US.
When there is an increase in the demand for the US dollars relative to the Swiss franc, the US dollars would appreciate.
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Answer:
The WACC will be 10% for average risk
below when the risk is low
and above 10% when the risk is higher than average
as the cost of capital (required return from the stockholders) will increase pushing the WACC higher
Explanation:
As the WACC is composed by the cost of debt and the cost of equity a higher risk will require a better return for the investor thus, the equity proportion that determinates the WACC will change along the project risk.
Answer:
$150,000×20,000=3.000.000.000
Explanation:
3.000.000.000÷10=300.000.000 years
