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1 year ago

Keynes argued that the downward slope of the demand for money curve depends on the?

Business

1 answer:

Naya [18.7K]1 year ago

6 0

Keynes argued that the downward slope of the demand for money curve depends on the rate of interest.

<h3>What is money curve?</h3>

A vertical curve that depicts the relationship between the supply of money and the interest rate; because the money supply is under the control of the central bank, it is unaffected by changes in the interest rate. The level of income and real GDP, the level of prices, expectations, transfer costs, and preferences are some of the most significant factors that might alter the demand for money.

Because the Fed determines the amount of money that is accessible without taking the value of money into account, the money supply curve is vertical. The downward slope of the money demand curve results from consumers having to carry more cash to make purchases when the cost of goods and services rises as the value of money declines.

Due to the inverse link between the amount of money demanded and the interest rate, the money demand curve has a negative slope. In other words, the interest rate, which stands for the opportunity cost of holding money, causes the money demand curve to slope downward.

The demand curve has a downward slope, which indicates that as the price falls, demand will rise. The demand curve has a decreasing slope since quantity is plotted on the x-axis and price is plotted on the y-axis.

Hence, Keynes argued that the downward slope of the demand for money curve depends on the rate of interest.

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The Western and Pacific Railroad has two divisions, the Western Division and the Pacific Division. The company recently invested

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The amount of track improvement cost that should be allocated to the Western Division is $3,200,000.

<h3>What amount should be allocated to Western Division?</h3>

The amount that should be allocated to Western Division is a function of the miles travelled on the Western division.

The amount to be allocated to Western Division : (miles travelled on Western division / total miles travelled) x cost of the revision

miles travelled on Western division = 800,000 miles
total miles travelled = 1,200,000 + 800,000 = 2,000,000 miles

The amount to be allocated to Western Division : (800,000 / 2,000,000) x 8,000,000 = $3,200,000

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7 0

2 years ago

Park Company reports interest expense of $340,000 and income before interest expense and income taxes of $6,120,000.(1) Compute

algol13

Answer: 1. 18 times

2. Park is in better position

Explanation:

1. Times interest earned is a financial ratio that measures interest coverage. It's essentially to check if a company can pay it's debt payments and is calculated by either EBIT or EBITDA divided by the total interest expense. The higher the better and anything above 2.5 times is usually considered.

Calculating would therefore be,

= $6,120,000 /$340,000

= 18 times.

2. As mentioned in the first answer, for the Times interest earned, the higher it is, the more favourable it is. So Park Company will be considered safer and are most definitely in a better or worse position than its competitor to make interest payments if the economy turns bad. The fact that theirs is 18 means that they can pay off their interest expense 5 times more than their competitor who can only repay 12 times.

If you need any clarification do comment.

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2 years ago

Lisa Smith decided to start her CPA practice as a professional corporation, Smith CPA, PC. The corporation purchased an office b

Over [174]

Answer:

B. Historical cost principle

Explanation:

In accounting, historical cost principle indicates that a business or an organization must record and account for both assets and liabilities at their purchase or buying price. In points that during bookkeeping, while recording the worth of an assets, the purchase price used in buying it must be recorded. Here, Lisa bought the building for $35000 but recorded $50000 because she believes that to be the real value. By doing so, lisa has violated the historical cost principle concept.

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2 years ago

Creating value within business units can happen when a firm tries to find and acquire either poorly performing firms with unreal

Strike441 [17]

Answer:

Parenting.

Explanation:

The complexity of transitional business conditions creates a necessity for creating value through aggregation of various businesses in complex corporate enterprise, which provides it the character of a multi-business firm. Businesses may be defined as being regardless of the enterprise chooses to work as organizationally separate profit-responsible units. this can be primary done to create a fit between ways the business creation is been done.

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2 years ago

Baden Company has gathered the following information. Units in beginning work in process 0 Units started into production 37,700

Flura [38]

Answer:

The materials equivalent units is 37,700

Conversion costs equivalent units is 32,480

Explanation:

The equivalent units of production for materials can be computed thus:

Description quantity % of completion Equivalent units

Completed units 29000 100 29000

(37700-8700)

Ending inventory 8700 100 <u> 8700</u>

total equivalent units for materials 37700

The equivalent units of production for conversion costs can be computed thus:

Description quantity % of completion Equivalent units

Completed units 29000 100 29000

(37700-8700)

Ending inventory 8700 40 <u> 3480 </u>

total equivalent units for conversion costs 32480

I applied 100% percentage of completion to ending inventory when determining materials equivalent units and 40% percentage completion when determining equivalent units for conversion cots as it given in the question

6 0

3 years ago