Answer:
1.The money demand will rise by 1.154%
2. The money demanded will fall and for a 1% increase in interest , the money demanded will fall by 0.38%
Explanation:
1. Money demand function
ln(m) = β0 +β1 ln(GDP)+β2R
Suppose β1 = 1.5 , β2 = −0.04 , GDP = $ 100 & R = 3%
ln(m) = 1.5 ln ($100) - 0.04 X 0.03
ln(m) = 6.91
m = 1002.247
Suppose the GDP increases by 1%; the new GDP will be = $ 101
ln(m) = 1.5 ln ($101) - 0.04 X 0.03
ln(m) = 6.92
m = 1013.81
If the GDP increases by 1% ,the money demand will rise by 1.154%
2.
If the interest rate increases from 3% to 4%
ln(m) = 1.5 ln ($100) - 0.04 X 0.04
ln(m) = 6.906155
m = $ 998.400
If the interest rate rises from 3% to 4% , the money demanded will fall and for a 1% increase in interest , the money demanded will fall by 0.38%
Answer:
Consider the economy of Arcadia. Its households spend 75% of increases in their income. There are no taxes and no foreign trade. Its currency is the are. Potential output Is 600 billion arcs (Scenario: Fiscal Policy) Look at the scenario Fiscal Policy. If actual output Is 500 billion arcs, to restore the economy to potential output government should by 25 billion arcs.
increase taxes
Explanation:
<u>Solution and Explanation:</u>
<u>The following journal entries are passed in the books of accounts.</u>
Purchase of merchandise on credit - no entry is to be passed
Contribution of automobile to the company:
Date Details debit credit
12- nov Automobiles 17000
TB Capital 17000
( To record contribution of automobile to the company)
Sale of merchandise on credit:
Not recorded in gernal journal
Return of merchandise sold:
Date Details debit credit
19- Nov Sales return and allowances 175
accounts receivable - KM 175
Answer:
B. customer relationship management
