Answer:
Classification of events as Shifting the Aggregate Demand Curve or Causing Movement along the Curve:
a. = shifting the aggregate demand curve.
b. = causing movement along the demand curve.
Explanation:
When technological advances generate wealth in a broad range of industries, the movement along the demand curve denotes a change in both price and quantity demanded. This is obtainable because technological advances usually reduce costs of production and prices. The reduced price can increase demand. On the other hand, inflation that drops to nearly zero will cause a shift in a demand curve because the quantity demanded can increase with the price of the good remaining the same.
Answer:
b.
Explanation:
Based on the information provided within the question it can be said that this is a liquidated damages clause if the amount is a reasonable estimate of the loss on a breach. This a safety feature placed in order to recover money lost on the negligence of the party that breached the contract, so that the other party does not suffer much loss.
Answer:
13%
Explanation:
the new cost of equity = old cost of equity + [(debt / equity) x (old cost of equity - cost of debt)]
the new cost of equity = 12%+ [(20 / 80) x (12% - 8%)] = 12% + 1% = 13%
Since we are in the MM world, taxes do not exist, therefore they are not included in the equation.