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1 year ago

Why did keynes believe that fiscal policy was more powerful/effective than monetary policy?.

1 answer:

6 0

Keynes believe that fiscal policy was more powerful/effective than monetary policy because the impact of an increase in spending or a cut in taxes would be multiplied by stimulating plug in demand for consumption items by households.

Fiscal policy may be defined as the usage of government spending and taxation to persuade the economy. Governments generally use economic coverage to sell robust and sustainable increases and decreases in poverty. Fiscal policy is used for spending and taxation to influence the economy by government. Governments commonly use fiscal policy to promote strong and sustainable growth and reduce poverty. There are three kinds of fiscal policy namely neutral policy, expansionary policy,and contractionary policy.

Learn more about fiscal policy at brainly.com/question/29307494

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I want to buy a new car. My choices are a red convertible sports car or a full-size pick-up

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pickup and 20,000 i think

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2 years ago

The marketing department, finance department, human resources department, and information systems department all operate at the

Nastasia [14]

The marketing department, finance department, human resources

department all operate at the functional level of an organization.

<h3>What is Functional level?</h3>

This level determines the daily operations of the various departments in

an organization. Examples include:

Strategy

Marketing

Finance

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They are involved in execution of strategies which is why functional level

is the most appropriate choice.

Read more about Functional level here brainly.com/question/26287826

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1 year ago

The following statements are true. Explain why. a. If a bond’s coupon rate is higher than its yield to maturity, then the bond w

krok68 [10]

Answer:

A Bond's current market value represented by $B_{0}$ is the present value of a bond as on today. Present value of a bond is it's future cash flows in the form of coupon payments and principal repayment discounted at investor's expectation in the market also referred to as Yield to maturity(YTM).

Present value of a bond is given by the following equation,

$B_{0} = \frac{C}{(1\ +\ YTM)^{1} } +\ \frac{C}{(1\ +\ YTM)^{2} } \ +\ ......+\ \frac{C}{(1\ +\ YTM)^{n} } \ +\ \frac{RV}{(1\ +\ YTM)^{n} }$

where C= Annual coupon payments

YTM = Yield to maturity/ cost of debt/ market rate of return on similarly priced bonds

RV = Redemption value of bond

n = number of years to maturity

<u>a. A bond's coupon rate is higher than it's yield to maturity, then the bond will sell for more than face value.</u>

Hence, if the company pays more interest than what is paid in the market on similarly priced bonds, such bonds shall sell at more than their face value.

<u>b. If a bond's coupon rate is lower than it's yield to maturity, then the bond's price will increase over it's remaining maturity.</u>

Similarly, if a bond pays lower rate of interest than the market rate of interest on similarly priced bonds, the bond shall sell at lower than it's face value and the price will increase over the remaining life of such bonds.

6 0

3 years ago

9. Problems and Applications Q9 Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan. Th

den301095 [7]

Answer: False

Explanation:

The real interest rate is the nominal interest rate adjusted for inflation.

If the nominal interest rate was made with inflation in mind and this inflation is less than anticipated, the real rate will be higher not lower than expected.

For instance: Assume the nominal rate is 8% and the two parties assumed inflation would be 4%. Real rate would be:

= 8 - 4 = 4%

If inflation is instead 2%, real rate would be:

= 8 - 2 = 6%

Real rate would be higher than anticipated.

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2 years ago

Al contracted to sell his house to bev. subsequently, they both changed their minds and agreed to cancel the contract. the contr

TEA [102]

Given that <span>Al contracted to sell his house to bev. subsequently, they both changed their minds and agreed to cancel the contract.

The contract between al and bev is discharged by rescission.</span>

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2 years ago