Prioritize, c. set your priorities straight before anything else
Answer:
The purpose of expansionary monetary policy is to increase the supply of money in the economy which would theoretically make it cheaper for people to borrow money to consume or for companies to borrow money for investment.
The whole thing therefore relies on people and companies borrowing. Sometimes however, monetary policy may work in increasing the amount of money in the economy but then a situation arises where people do not want to borrow and companies do not want to borrow for investment either because they do not think the economy is strong enough for expansion or for whatever other reason. .
They are being given cheaper access to money (led to the water) but they refuse to borrow and invest (can't be made to drink).
Answer:
$50,000
Explanation:
Note: There is an assumption that the payment is yearly payment & is received at the end of every year
Present Value of Perpetuity = Payment Receivable in 1st year/ (Discount rate - Growth rate)
Present Value of Perpetuity = 500/(2%-1%)
Present Value of Perpetuity = 500/0.01
Present Value of Perpetuity = $50,000
So, the present value of all the future trust payments is closest to $50,000
