Answer:
The country has closed economy; it means there is no other trading relation with, outside countries. Export imports do not affect the economy of the country, and here is no government interference as mentioned in the question. This is a self sufficient country, its demand fulfilled from inside of the country. So its aggregate price levels and interest rate are fixed. MPC or the marginal propensity to consume indicates whether there is an increase in disposable income or increase in consumption. Here consumption increases equal to the increase in the income.
MPC = ΔC /ΔY which is constant here.
The increase in income in this country is mostly permanent and increases in a fix period of time and proportionately.
C= 200 +0.75 YD (YD is disposable income), Y=75, GDP =$900
The economy achieves it’s equilibrium level when supplies meets demand or the GDP is equals to it’s total expenditure. MPC is a fraction between 0 and 1 , MPC means a change in consumption brings the change in YD . here the MPC is equals to MPS which means the change in saving bring by the change in disposable income. All income here saved or consumed. So the change in income equals to the change in consumption or saving.
MPC+ MPS = 1
So the average propensity to consume is proportionate to income which is spend on consumption. APC= C/ YD. And the average proportionate to save is equals to income saved APS= S/YD . so here APC +APS = 1. The increase in production or price leads to the increase in the total value of output, that is the equilibrium condition.
Explanation:
Answer:
Present value is $74,116.62
Explanation:
Giving the following information:
The machine pays= $2,655.00 every six months
n= 27 years= 54 semesters
Interest rate= 0.13/2= 0.065
First, we need to calculate the final value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual pay
FV= {2,655*[(1.065^54)-1]}/0.065= $1,183,854.61
Now, we can calculate the present value using the following formula:
PV= FV/(1+i)^n
PV= 1,183,854.61/(1.065)^44= $74,116.62
Answer:
Accounting standard-setters such as International Accounting Standards Board, use the following process in establishing accounting standards:
Research-discussion paper-exposure draft- standard
As a result,option D is correct.
Explanation:
When a new standard is envisaged,rigorous research is undertaking,followed by the call for experts to submit discussion papers from exposure draft is crafted before a standard is finalized.
Answer:
Credit risk
Explanation:
Credit risk is the risk that arises when the borrower fails to repay the loan to the person or the financial institution from whom he took the loan. It derives the loss possibility suffered by the lender with respect to the interest and principal amount not received by the borrower
According to the given scenario, the credit risk option is appropriate as it fits to the situation and extract the same meaning as discussed above
