Answer: decrease; increase
Explanation:
According to the Liquidity Preference theory, in the short run, increasing money supply will mean that there is more money in the economy which translates to more money for investment. This will lead to a decrease in interest rates as there are more sources of investment.
In the long run however, the Fischer effect shows interest will move with inflation. If money supply is expanded, it will lead to inflation in the long run because there will be more demand. This rise in inflation will cause interest rates to rise as well.
<u>Studies indicate that the price elasticity of demand for beer is about 0.9. A government policy aimed at reducing beer consumption changed the price of a case of beer from $10 to $20. According to the midpoint method, the government policy should have reduced beer consumption by</u> (c) 60%.
Explanation:
T<u>he Price elasticity of demand (PED or Ed) </u>is defined as a measure used in economics to show the relation or elasticity of the quantity demanded of a good or service to increase in its price when only the price changes.
<u>The price elasticity of demand is calculated as the percentage change in quantity divided by the percentage change in price.</u>
<u></u>
<u>Studies indicate that the price elasticity of demand for beer is about 0.9. A government policy aimed at reducing beer consumption changed the price of a case of beer from $10 to $20. According to the midpoint method, the government policy should have reduced beer consumption by</u> (c) 60%.
Answer:
WACC=(Ke*E+D*Kd)/(E+D)
Explanation:
Ke (Cost of Equtiy)=11.17%
Kd (Cost of Debt)=5.32%
E (Market value of Equity)=?
D(Market Value of Debt)=65
If D market value is 31% of Total Market value of company so by grossing up D We get E+D=65/.31=210. So E=210-65=145
WACC=(Ke*E+D*Kd)/(E+D)
WACC=(11.17%*145+65*5.32%)/(145+65)
WACC=(16.2+3.5)/(210)
WACC=9.36%
<span>The action in 2008 in which milk prices increased and one milk consumer stated that the reason he cut down on milk consumption is so that he could drive his car represents </span>movement along the demand curve for milk.
<span>Movement along the demand curve usually occurs when the manufacturer raises or lowers the price of the product.</span>
Question Completion:
We assume that the variable manufacturing cost is $55 per unit.
Answer:
The change in operating income = $60,000
Explanation:
a) Data and Calculations:
Special order = 3,000 units
Price of special order = $75 per unit
Variable cost per unit (assumed) = $55
Fixed costs = unchanged
Variable marketing and administrative costs = unchanged
The change in operating income = $60,000 (($75 - $55) * 3,000)
b) Given the above scenario and the assumed variable cost per unit of $55, the change in operating income will be a total of $60,000, which adds to the normal business of the company.
