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oksano4ka [1.4K]

4 years ago

7

Real gdp per person is $10000 in country A $20000 in country B and $30000 in country C. The saving rate increases by the same ra

te in all three countries. Other things equal, which country grows the fastest

1 answer:

Zielflug [23.3K]4 years ago

6 0

Country C. Each person earns an average of $30,000 a year. The higher that pay, the more likely for faster development.

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Frank is lending $1,000 to Sarah for two years. Frank and Sarah agree that Frank should earn a 2 percent real return per year. I

egoroff_w [7]

Answer:

a. 23%.

b. Frank should charge Sarah 2% more than the inflation rate.

Explanation:

a. Find the nominal rate of interest.

To find this value we must follow this equation:

$NI=RI+IR$

Where NI = Nominal Interest, RI= Real Interest, and IR= Inflation Rate.

a.1. Find the real interest rate.

The problem statement gives us this value: 2% real return per year, as agreed by Sarah and Frank.

a.2. Find the inflation rate.

Here we follow this equation:

$IR=(\frac{CPI_{F} -CPI_{B} }{CPI_{B} } )*100$

Where:

CPI(F) is the CPI of the final year, in this case, it would be 121 (the expected CPI for two years, which is the established loan time).

CPI (B) is the CPI of the base year, that is, the CPI in force at the time that Frank makes the loan, 100 in this case.

We replace these values:

$IR=(\frac{121-100}{100} )*100$

$IR=(\frac{21}{100} )*100$

$IR=0.21*100$

$IR=21%$

The inflation rate equals 21%.

a.3. Replace in the equation of the nominal rate of interest.

$NI=RI+IR$

$NI=0.02+0.21$

$NI=0.23$

So, the nominal rate of interest Frank should charge Sarah equals 23%.

b. Find out how much Frank should charge Sarah (regarding inflation and considering that it is unknown).

The inflation rate reduces the return expected by Frank. Therefore, the nominal interest rate charged must be higher than the inflation rate, in order to ensure a positive real returns. In this case, since it is not known exactly what that inflation rate is, Frank must charge 2% (expected return) above what the inflation rate can record.

Hence, the short answer is: Frank should charge Sarah 2% more than the inflation rate.

8 0

3 years ago

Which of the following activities are credits? The impact on accounts receivable from a $10 million collection from a customer.

bagirrra123 [75]

i don’t know .........

3 0

4 years ago

What idea did both the Regulators and Stamp Act Congress share? a. Colonial governors should make decisions unilaterally. b. Boy

alexandr1967 [171]

Answer:

the correct answer is

<em> c. Colonists wanted to be represented in the government.</em>

<em></em>

good luck

8 0

3 years ago

on december 31 of last year, wolfson corporation had in inventory 450 units of its product, which costs $22 per unit to produce.

11Alexandr11 [23.1K]

Answer:

$18,650

Explanation:

FIFO means first in, first out. It means its the oldest inventory that are sold first .

If the company sold 800 inventory, the 800 would be taken from the beginning inventory which is a total of 450 and the remaining 350 would be taken from the inventory produced in January.

Cost of goods sold

450×$22 = $9,900

350 ×$25= $8,750

$9,900 + $8,750 = $18,650

I hope my answer helps you

8 0

3 years ago

Why do marketers segment their markets and what are the basic criteria for doing so successfully?

Firlakuza [10]

Answer: enables marketers to tailor marketing mixes to meet the needs of particular population segments

Explanation:

Market segmentation enables marketers to tailor marketing mixes to meet the needs of particular population segments. Segmentation helps marketers identify consumer needs and preferences, areas of declining demand, and new marketing opportunities. the marketing strategy of almost all successful organizations.

8 0

2 years ago