Answer:yes and yea and no
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Answer: (D).
According to the real business cycle, "changes in the level of technology are the main causes of inflation and fluctuations in real GDP".
Explanation:
The "real business cycle" states that an economy during its lifetime will go through all the various stages of a business cycle which include; expansion, peak, recession, depression, trough and recovery. There will be periods where economic activities will be high and other periods when they will be low.
According to the real business cycle, technological innovation or shocks, which determine the extent to which inputs are converted to outputs, are responsible for the changes in the economy (such as inflation and real GDP fluctuations).
Answer:
Consumer behaviour is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services, and how the consumer's emotions, attitudes and preferences affect buying behaviour
Answer: a. $30,000
b. $21,600; $14,000
c. $5,600
d. 40%
Explanation;
a. When the company is assumed to have no debt and pays its net income entirely as dividends then the Value of the firm's equity is;
= <em>Earnings after taxes / Cost of Equity</em>
Risk free interest rate will be used. The Earnings after taxes are used because taxes have to be taken out to find out the amount due to shareholders for the year.
= 2,500 ( 1 - 40%) / 5%
= 1,500/ 5%
= $30,000
b. If interest is paid then the Value of equity will be;
= <em>Earnings after interest and taxes / Cost of Equity</em>
= (2,500 - interest * ( 1 - tax) ) / Cost of Equity
= (2,500 - 700 * ( 1 - 40%) ) / 5%
= $21,600
Value of debt = Interest/cost of debt
=700/5%
= $14,000
c. The total value of the firm without Leverage has been shown to be $30,000.
The total value of the firm with leverage would be;
= <em>Value of Equity assuming debt + Value of Debt</em>
= 21,600 + 14,00
= $35,600
Difference;
= 35,600 - 30,000
=$5,600
d. Value of debt is $14,000
= (5,600/14,000) * 100%
= 40%
The money multiplier is 20 and the change in the money supply is $200 billion.
<h3>What is the money multiplier and change in money supply?</h3>
The money multiplier is the inverse of the reserve ratio. Reserve ratio is the percentage of deposits that is required of commercial banks to keep as reserves. The lower the ratio, the higher the increase in money supply.
Money multiplier = 1 / reserve ratio
1/5%
1 / 0.05 = 20
The change in money supply is the product of the money multiplier and the change in reserve.
Change in money supply = money multiplier x change in reserves
20 x $10 billion = 200 billion
To learn more about reserve ratio, please check: brainly.com/question/6831267
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