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1 year ago

The situation where the buying power of money in terms of goods and services increases is called:_____

Business

1 answer:

Alla [95]1 year ago

6 0

The situation where the buying power of money in terms of goods and services increases is called <u>deflation</u>

In economics, deflation is a general decline in the price level of goods and services. Deflation occurs when inflation falls below 0% (negative inflation). Inflation depreciates a currency over time, while sudden deflation increases it. As a result, more goods and services can be purchased with the same currency than before. Deflation is different from disinflation, which is a slowdown in the rate of inflation. H. Inflation is declining but still positive.

Economists generally consider sudden deflationary shocks to be a problem in the modern economy. This is because the real value of debt increases, especially if deflation occurs unexpectedly. Deflation can also exacerbate the recession and lead to a deflationary spiral.

Learn more about deflation here: brainly.com/question/13562161

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Lambert Manufacturing has $120,000 to invest in either Project A or Project B. The following data are available on these project

Angelina_Jolie [31]

Answer:

c. $74,450

Explanation:

The computation of the Net present value is shown below

= Present value of all yearly cash inflows after applying discount factor + salvage value - initial investment

where,

The Initial investment is $120,000

All yearly cash flows would be

= Annual net operating cash inflows × PVIFA for 6 years at 14%

= $50,000 × 3.8887

= $194,435

Refer to the PVIFA table

Now put these values to the above formula

So, the value would equal to

= $194,435 - $120,000

= $74,435 approx

6 0

3 years ago

How do changes in the environment affect businesses and thus consumers?

fiasKO [112]

Answer:

If the environment changes then the businesses will make products you need in that environment so consumers will buy more of that product because they need it. For example, if it's summer you need new summer clothes so companies will start to make summer clothes so people will buy them instead of winter or fall clothes because of the environment. So businesses are getting money and the consumers are getting what they need or want.

8 0

1 year ago

As the average hourly wage increases from $18 per hour to $20 per hour, the quantity of frozen dinners demanded decreases from 3

horrorfan [7]

Answer:

The income elasticity of demand for frozen dinners is negative when there is an increase of hourly wages. -51%

Explanation:

When the income elasticity is negative it means that the good is inferior so when the income is increased, the demand of the good decrease beacuse its demand change to a better quality good. For instance in this case a fresh meal.

income elasticity % = % change in quantity / % change in income

(((3350-3550)/3550)/((20-18)/18))*100

7 0

3 years ago

Monique lends Taylor $1,200 on March 15, 2009. Taylor is expected to return $1,260 on March 14, 2010. Monique expects inflation

Irina-Kira [14]

Answer:

2.94%

Explanation:

Real Rate of Return is the actual rate of return that an investor gets from investment excluding any inflation effect.

Present Value = PV = $1,200

Future Value = FV = $1,260

Numbers of period = n = 1 year

Use Following Formula to calculate the nominal Interest rate

FV = PV x ( 1 + r )^n

$1,260 = $1,200 x ( 1 + r )

$1,260 / $1,200 = 1+r

1.05 = 1 + r

r = 1.05 - 1 = 0.05 = 5%

As the 5% is the Nominal Interest rate

we Will Use the Fisher Effect formula to calculate the real Interest rate

1 + Nominal Interest Rate = ( 1 + Real Interest Rate ) x ( 1 + Inflation Rate )

1 + 5% = ( 1 + Real Interest Rate ) x ( 1 + 2% )

1 + 0.05 = ( 1 + Real Interest Rate ) x ( 1 + 0.02 )

1.05 = ( 1 + Real Interest Rate ) x 1.02

1 + Real Interest Rate = 1.05 / 1.02

1 + Real Interest Rate = 1.0294

Real Interest Rate = 1.0294 - 1

Real Interest Rate = 0.0294 = 2.94%

8 0

2 years ago

Read 2 more answers

When a government limits imports via tariffs and quotas and subsidizes exports in order to maximize exports and minimize imports

Jlenok [28]

Answer:

The correct answer is letter "A": A mercantilist philosophy.

Explanation:

The mercantilist philosophy is the economic approach whereby governments control their economies to reduce imports and maximize exports. It is believed that by taking such a measure, the wealth of the nation would increase as a result of the surplus in the balance of trade of the country. The trade balance is calculated by subtracting imports from exports.

3 0

2 years ago