The quantity of money demanded <u>increases</u> and the nominal interest rate <u>falls.</u>
In the short run, if the Fed(Federal Reserve) increases the quantity of money, the quantity of money demanded will increase and the nominal interest rate falls.
The quantity of the money supplied and the nominal interest rates has an inverse relation. That is, when there is a huge supply of money in a short-term, it will cause an increase in the nominal interest rate.
The nominal interest rate refers to the interest rate before adjusting to inflation or price-hike. It balances the supply and demand of money.
So when there is an increase in the supply of money ,there will be the resulting increase in the demand of money too. The total money that the population wants to hold is referred as the money demanded.
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Answer:
All of the above are true.
Explanation:
The following statements about a corporation is true.
<u>1. A corporation is a separate taxpaying entity that must file a tax return annually. </u>
A corporation is a legal entity that is separate and distinct from its owners. they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, <u>and pay taxes annually just like individuals.</u>
<u>2. A newly formed corporation must select its basic accounting method. </u>
A newly formed corporation will have to choose its accounting method. Accounting method refers to the rules a company follows in reporting revenues and expenses. The two primary methods are accrual accounting and cash accounting.
3. The terms "regular corporation" and "C corporation" are synonymous.
The C corporation is the <u>standard (or default) corporation under IRS rules.</u> The S corporation is a corporation that has elected a special tax status with the IRS and therefore has some tax advantages, hence cannot be said to be regular but has obtained a special status by election.
Answer:
Costs that have already been incurred
Explanation:
Sunk costs are costs already incurred which are irrecoverable. These costs will stay the same irrespective of business actions and are also not considered for business decision in the future as they are deemed irrelevant .
If an organization wants to decide on business actions, they make use of relevant costs as they are cost meant for the future and will still be incurred. Revenue and cost that varies are only considered by organization to make a decision.
Example of sunk cost is money spent on rent. This money incurred cannot be recovered once it has been paid.
In the near run, the firm should keep producing because the price is higher than the average variable cost. In economics, the variable cost per unit is known as the average variable cost. Variable cost is divided by the output to derive the average variable cost.
In the short term, the firm use the average variable cost to determine whether to stop production. The variable cost per unit of total product is known as the average variable cost (AVC) (TP). Divide variable cost at a given total product level by total product to compute AVC. This computation is used to calculate the cost per unit of output.
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Answer:
(A) $31,400
(B) $6,400
Explanation:
Joseph contributed $25,000 in cash and equipment
The tax basis is $6,400
The fair market value paid to Bill hill partnership is $12,600
(A) Joseph tax basis in his partnership interest can be calculated as follows
= contribution+tax basis
= $25,000+$6,400
= $31,400
(B) Since Joseph contributed a tax basis of $6,400 to Bill hill partnership in exchange for a partnership interest then, Bill hill's basis in the equipment is $6,400
