Answer:
The demand for normal goods will fall or decrease and the demand for inferior goods will rise or increase
Explanation:
What is a recession? - Recession is a period in business cycle in which the aggregate economic activity of a country is slowing down or declining.
During recession, there is a decrease in spending on the part of both producers and consumers. Unemployment becomes high, so income level drops.
Demand for normal goods in this period drops because of the fall in level of income. The consumers are managing what is left from their income.
And demand for inferior goods rises because as a result of the constraints (money), consumers now prefer low quality goods which usually go for a lower price than normal goods
Answer:
Answer is $1,365.3 billion, 5.
Refer below.
Explanation:
Suppose the current reserve ratio is 25% and the level of checkable deposits represents total reserves. If the Federal Reserve lowered the reserve ratio to 20%, excess reserves are now $1,365.3 billion and the money multiplier is 5.
Answer:
The WACC change if the new tax rate was adopted is - 0.35%
Explanation:
For computing the WACC change, first we have to determine the after tax cost of debt by applying the 40% and 45% tax rate which is shown below:
After tax Cost of debt = Cost of debt × ( 1- tax rate)
For 40% tax rate, it would be
= 7% × ( 1 - 40%)
= 4.2%
For 45% tax rate, it would be
= 7% × ( 1 - 45%)
= 3.85%
The change in WACC would be
= 3.85% - 4.2%
= - 0.35%
Answer:It is
Explanation: because the line is divided in different sector. Each sector has specific operations, using specific tools and specific process. Each operation or group of operations must be done by employees or workers. Those worker also required specialized training.
Answer:
The correct answer is FALSE.
- First it's not sound investment advice to put all his savings into an investment because as the narrative rightly points out, he may have other needs.
- Second, high growth stock are also
- high risk
- they only pay in the long term only if the company is successful because dividends are re-invested which is one of the reasons the companies grow quickly.
Although they are high risk, they also have great advantages such as:
- High growth rate: this means if all goes well David will enjoy a good return on his investment;
- It's also a way to protect his money from erosion by inflation
What can David do?
Subject to the advise of a professional investment professional
- David needs to take into consideration his immediate needs, set aside some funds to take care of that.
- Invest the balance into a mix of high growth rate stock which are high yielding but risky and low growth rate but secure investment like government bonds.
- Start a small business by the side or get a job in the interim as he continues with his new life.
Cheers!
