Explanation:
Examples of determinants of demand are:
- The price of the good or service. - The nominal price of a good is its value in terms of money
- The income of buyers. - available to purchase a good
- The prices of related goods or services. - one of the other factors affecting demand
- The tastes or preferences of consumers. - the subjective (individual) tastes, as measured by utility, of various bundles of goods.
- Consumer expectations. -the feelings, needs, and ideas that customers have towards certain products or services
If you have any questions feel free to ask in the comments. - Mark
Answer:
a. $265,336
Explanation:
we are told to calculate which amount will make both payments equal:
- payment 1 = $1,000,000 in 5 years
- payment 2 = $500,000 now + ? in 5 years
in order to be able to compare them, we must determine the value of the $500,000 paid now in 5 years:
future value = present value x (1 + interest rate)ⁿ
future value = $500,000 x (1 + 0.08)⁵ = $734,664
$1,000,000 = $734,664 + ?
? = $1,000,000 - $734,664 = $265,336
Answer: Sell government bonds and raise the discount rate
Explanation:
Fed uses open market operations for controlling the money supply in the economy. If fed wants to create a tight money market then it should sell the government securities to the public which will reduce the money supply in the economy. It is known as contractionary monetary policy.
Discount rate is defined as the interest rate on the discounted loan. If there is an increase in the discount rate then it will be more expensive for the banks to borrow from Fed and hence they borrow less. This will decrease the lending capacity of the banks which reduces the money supply in an economy.
Therefore, Sell government bonds and raise the discount rate are the best ways to contract the money supply.
Answer:
Discretionary funds are used for spending, investing, or saving after paying taxes and paying for personal necessities, such as food, shelter, and clothing.
Explanation:
Discretionary income incorporates cash spent on extravagance things, excursions, and unnecessary merchandise and ventures. Since Discretionary income is the first to shrivel in the midst of an occupation misfortune or pay decrease, organizations that sell optional merchandise will, in general, endure the most during monetary downturns and downturns.
Discretionary income is a significant marker of monetary well being. Financial specialists use it, alongside extra cash, to determine other significant monetary proportions, for example, the peripheral affinity to expend (MPC), minor inclination to spare (MPS) and purchaser influence proportions.
Answer:
The answer is 'Buy a Stock Index Future'
Explanation:
To take best advantage of this situation, Mr Smith should go long(buy) on this stock.
Stock Index Future js a method of derivates. Futures, like forward contract is a forward commitment which obligates the buyer to purchase an asset or the seller to sell an asset and have a predetermined future date and price. Future is used to hedge against worse future situations.
