Answer: c. small changes in economic growth rate lead to large GDP changes over time.
Explanation:
If there is even a small change in the rate at which the economy is growing, this increase will increase by even more the year afterward and then even more as time goes on. This is because the interest is being compounded overtime.
Look at the future value formula that shows compounding for instance:
Future value = Amount * (1 + rate) ^ number of periods
Assume even a change of 2% in the growth rate. In 30 years, this rate would have increased the economy by:
= 1 * ( 1 + 2%)³⁰
= 1.81
Which is a rate of:
= 1.81 - 1
= 81%
What started off as only 2% became 81% in 30 years. This is what compounding does.
Answer:
(a) 10.4%; 16.73%
(b) 6.33%
Explanation:
Given that,
Wages paid to the workers in 2016 = $25 per hour
Price level in 2016 = 241
Wages paid to the workers in 2017 = $41 per hour
Price level in 2017 = 245
Real wage rate in 2016:
= (Nominal wages ÷ Price level) × 100
= ($25 ÷ 241) × 100
= 0.104 × 100
= 10.4%
Real wage rate in 2017:
= (Nominal wages ÷ Price level) × 100
= ($41 ÷ 245) × 100
= 0.1673 × 100
= 16.73%
Therefore, the real wage increase received by these workers in 2017 is calculated as follows:
= Real wage rate in 2017 - Real wage rate in 2016
= 16.73% - 10.4%
= 6.33%
Hence, these workers do get a raise between the two years.
Answer: monopolistically competitive industry
Explanation:
Based on the above information, Hot Wok Cuisine is most likely operating a monopolistically competitive industry.
This is a type of industry whereby the firm's make their own pricing and output decisions. There are large number of competitors, but the products that they sell are slightly different from one another. Also, there some entry barriers.
We can infer that the restaurant differentiates itself from a large number of competitors by providing exclusively organic Chinese cusine and there are entry barriers.
Answer: 35.49
Explanation:
The projected sales will be:
= $76,000 × $36
= $2,736,000
The desired return on the investment will be calculated as the Investment multiplied by the desired return rate. This will be:
= $240,000 × 16%
= $240,000 × 0.16
=$38,400
The total target cost will now be:
= $2,736,000 - $38,400
= $2,697,600
The The target cost per crepe maker is closest to:
= $2,697,600/$76,000
= 35.49
Answer:
There would be a decrease in equilibrium quantity of movies and an indeterminate change on equilibrium price of movies
Explanation:
A a result of the decrease in consumption during winter, price of movies and quantity of movies would decrease. As a result of the decline in supply, prices would rise and quantity would fall.
Taking these two effects together, there would be a decrease in equilibrium quantity of movies and an indeterminate change on equilibrium price of movies
Please check the attached image for a graphical illustration