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Sedbober [7]
3 years ago
9

According to the Fisher equation, if the expected inflation rate is less than the actual inflation rate, then the actual rate of

return will be:
A.
lower than the equilibrium interest rate.

B.
the same as the equilibrium interest rate.

C.
higher or lower than the equilibrium interest rate, depending on the degree of money illusion.

D.
higher than the equilibrium interest rate.
Business
1 answer:
Svetlanka [38]3 years ago
5 0

Answer:

D. higher than the equilibrium interest rate.

Explanation:

The Fisher equation at equilibrium ; i = r + τe helps you to answer this question whereby;

i = nominal interest rate

r = real interest rate

τe = expected inflation rate

If we re-write it beginning with real interest rate ; r = i - τe .

So, considering the above equation, if the <em>actual</em> inflation rate turns out to be lower than <em>expected</em> , we will have a lower τe and the difference  (i - τe) will be bigger making the real interest rate higher than equilibrium.

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Other things equal, and assuming efficient markets, if a Honda Accord costs $24,682 in the U.S., then at an exchange rate of $1.
faust18 [17]

Answer:

Option (D) is correct.

Explanation:

Cost of Honda accord in the United States = $24,682

The exchange rate between the Great Britain and United states is as follows:

1 pound sterling = $1.57

Hence,

The cost of Honda accord in Great Britain:

= Cost of Honda accord in the United States ÷ Value of the 1 sterling pound in terms of U.S dollar

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3 years ago
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Sonbull [250]

Answer:

$1,250

Explanation:

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Using this formula

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Let plug in the formula for

Customer lifetime value (CLV) = 0.8 / (1 + 0.12 - 0.8)

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Therefore the best estimate for the lifetime value of an average customer using the simplified customer lifetime value (CLV) equation will be $1,250

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Answer:

The correct answer is letter "C": The conjunctive rule.

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Answer:

Explanation:

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The journal entry is shown below:

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