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2 years ago

According to classical macroeconomic theory and monetary neutrality, changes in the money supply affect?

1 answer:

6 0

According to classical macroeconomic theory and monetary neutrality, changes in the money supply affect the GDP deflator

A measure of inflation in the prices of goods and services produced in the United States, including exports. The GDP deflator, though calculated differently, reflects the GDP price index very well. The GDP deflator is used by some companies to adjust payments for contracts.

GDP deflator = nominal GDP / real GDP * 100

Other price indexes such as CPI and GDP deflators are not formed in fixed baskets of goods and services. The basket changes each year depending on the investment and consumption patterns of the people of the year.

The GDP deflator is an essential indicator of the economy and helps to compare the year-to-year rise in price levels of goods and services. Unlike the Consumer Price Index (CPI), the GDP deflator allows comparisons across multiple time periods without using the base year as a constant or specific commodity basket.

Learn more about GDP deflator here: brainly.com/question/25084407

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What happens if the amount of Bad Debt Expense is overstated at year end? A : Net income will be overstated. B : Allowance for D

Yuri [45]

Answer:

D. Net Accounts Receivable will be understated

Explanation:

5 0

3 years ago

Neuman Corporation Convertible Bonds The following data apply to Neuman Corporation's convertible bonds: Maturity: 10 Stock pric

Natalija [7]

Answer:

A. The bond’s conversion ratio is 28.57

B. The bond’s conversion value is $857.14

C. The bond’s straight debt value is $798.70

D. The minimum price at which Neuman’s bonds should sell is $857.14

Explanation:

A. In order to calculate the bond’s conversion ratio we would have to calculate the following formula:

bond’s conversion ratio=par value/conversion price

According to the given data:

par value=$1,000

Conversion price=$35

Therefore, bond’s conversion ratio=$1,000/$35

bond’s conversion ratio=28.57

B. To calculate the bond’s conversion value we would have to make the following calculation:

bond’s conversion value=bond’s conversion ratio*Stock price

bond’s conversion value=28.57*$30.00

bond’s conversion value=$857.14

C. To calculate the bond’s straight debt value we would have to calculate the following formula:

bond’s straight debt value=PV(0.08,10,50,1,000)

bond’s straight debt value=$798.70

D. The minimum price at which Neuman’s bonds should sell is $857.14

7 0

2 years ago

Barbara made a contract to sell a house to Bolton. The agreement stated that it was contingent upon the buyer being able to secu

Levart [38]

Answer and Explanation:

A due on sale clause is simply a stipulation in the mortagage agreement that the

"borrower if he wants to sell the property to some other person, first of all he (borrower) shall repay the entire outstanding mortagage amount and then only it is possible to sell the property which is secured under Mortagage agreement.

Hence in essence, the borrower must repay before selling it to some other person which will result in paying the sale proceeds of house to the lender first and the Borrower again has to take loan sometimes from the same lender.

Hence it is imperative that the mortagage obligation cannot be transferred to any other person. That is any subsequent buyer cannot ASSUME the mortagage. Therefore due on sale

Clause prevents assuming of mortagages.

6 0

3 years ago

Consider the circular flow model to answer the questions that follow.

Zarrin [17]

Answer:

The answer is :

A. Resource market - income

B. Expenditure - product market.

Explanation:

A. Resource market - income

B. Expenditure - product market

The circular flow model shows how money moves through the economy in exchange for goods, services, and resources.

In circular flow of income, households provide inputs to firms through the resource market(matket where households supply land, labor, capital, and entrepreneurship) in exchange for money(income or wages).

Also in circular flow of income, firms receives expenditure from household and this type of market is called product market(which refers to a place where goods and services are bought and sold)

6 0

3 years ago

How do keynesian economic policies differ from the traditional laissez-faire policies developed by adam smith?

shusha [124]

Keynesian economic basically means that the goverment has to step in and try to stimulate economic wealth. This is were macroeconomics comes to play. Laissez fair in Belgium means hands off or lay. This explains why laissez fair is a strategy our previous presidents used to stop the Great Depression. In other words it means the govermeant steps out of helping hand and count on capitalism.

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3 years ago