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Alina [70]
3 years ago
12

The Fisher Effect has all of the following components, except: (A) Compensation for Inflation on Investment Earned(B) Compensati

on for Inflation of Original Investment(C) Real Rate on the Investment(D) Expected Rate of Return
Business
1 answer:
melamori03 [73]3 years ago
6 0

Answer:

D) Expected Rate of Return

Explanation:

The Fisher effect states that in response to a change in the money supply, the nominal interest rate changes hand-in-hand with changes in the inflation rate in the long run. It does not specify any component to derive expected rate of return on the investment. Take for instance, a monetary policy were to cause an inflation to increase by 5% points, the nominal interest rate in the economy would consequently increase by 5% points too.

Fisher effects phenomenon effects most In the long run than in the short run. In essence, if nominal interest were set based on expected level of inflation. if there is an unexpected inflation, real interest rates can drop in the short run because to some degree the nominal interest rates are fixed. However, overtime, there will be an adjustment with the nominal interest rate to equal with the new expectation of inflation but the expected rate for the return is not a component stated or can be drawn from the Fisher Effects theory.

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Consider a Cobb-Douglas production function with three inputs. K is capital (the number of machines), L is labor (the number of
olga_2 [115]

Based on the above scenario, the production function is Y=K1/3L1/3H1/3.

<h3>What is  production function?</h3>

The word production function is known to be an equation that is said to be the one that shows the relationship between the quantities of productive factors (that is labor and capital) that are said to be used and also the number of product that has been obtained.

Note that from the above, the equation that stands for Cobb-Douglas production function with three inputs. K is capital (the number of machines), L is labor, and H is human capital  is Y=K1/3L1/3H1/3.

Learn more about production function from

brainly.com/question/25672041

3 0
3 years ago
Alternative A has a rate of return of 14% and Alternative B has a rate of return of 17%. If the investment required in B is larg
charle [14.2K]

Answer:

The answer is "larger than 17%".

Explanation:

Assume the sum of investment as B is more than A:

In part A:  

                                                                        A                    B           Increment

Purchase(assumed)                                          100              150                   50  

Departure Rate                                                   14%              17%                

Return                                                                 14                25.5               11.5      

The rate of return increases( \frac{11.5}{50} \times 100)                                                       23      

In part B:  

                                                                         A                    B           Increment

Purchase(assumed)                                          100              120                   20  

Departure Rate                                                  14%              17%                

Return                                                                 14                20.4               6.4      

The rate of return increases( \frac{6.4}{20} \times 100)                                                        32      

8 0
3 years ago
Winds sweep the sea floor of the Arial sea and blow dust, salt and particles hundreds of miles​
ivolga24 [154]

Answer:

yes, what else do you want to tell me

5 0
3 years ago
You borrow $10,000 today at a nominal rate of 5%; inflation for the past 10 years has been exactly 2%. Today, inflation instantl
Tamiku [17]

Here is the answer choice to the question

a. the real rate of interest on your loan is 14%.

b. the real rate of interest on your loan was previously 10% and is now 35%.

c. the real rate of interest on your loan is now –2%.

d. you will pay the lender back exactly $9,500.

e. you will pay the lender back exactly $10,700

Answer:

C. the real interest rate on your loan is now -2%

Explanation:

The real interest rate of can be gotten by subtracting the nominal interest rate from the inflation rate from nominal interest rate

Inflation rate = 7%

Nominal interest rate= 5%

= 5 percent - 7 percent

= -2%

The real interest rate can be defined as the rate of interest an investor, saver or lender is going to receive after they have allowed for inflation.

6 0
3 years ago
Often, ________ are not included on all-staff memos, invited to events, or offered the same bonuses or perks offered to full-tim
CaHeK987 [17]

Answer: Part time employees

Explanation: These are employees that do a smaller amount of work than the full designated amount of time throughout the course of a typical work week. The amount of time could range from one to 20hours to some companies and one to 34 hours to others. The employees usually not included in retirement proposals of the company that hired them and also not given organized provision of medical care privileges.

4 0
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