Outflow of financial capital : Depreciating value of the U.S. dollar : Increased net exports
<u>Explanation:</u>
There will be an immediate outflow of financial capital due to the fall in the interest rates as it will be no more profitable in relation to other nations. Due to the capital outflow, the US currency demand will fall and results to the decrease in the exchange rate (price) or it can be said that the exchange rate depreciates.
This depicts that, the US exports will be cheaper as the US dollar price or exchange rate decreases. In other words, it can be stated that the value of the other nations’ currencies will increase as compared to the US currency.
This will make it easier to purchase the same baskets for reduced bill amount and thus the exports may get increased.
Insurance companies create a pool of funds to handle uncertain loss.Insurance companies are in the business of assuming risk on behalf of their customers in exchange for a fee. <span>Thetransaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in return of the insurer's promise to compensate the insured in the event of a covered loss. </span>
Answer:
$200,000
Explanation:
The computation of the amount of pension expense is shown below:
= Service cost + interest cost - expected return + amortization + actuarial gain
= $120,000 + $2,500,000 × 6% - $2,000,000 × 8% + $40,000 + $50,000
= $120,000 + $150,000 - $160,000 + $40,000 + $50,000
= $200,000
Hence, the amount of pension expense is $200,000 and the same is to be considered
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