All categories

2 years ago

A period of very low inflation would most likely lead to

2 answers:

8 0

Inflation is an increase in price and decrease of purchasing. If inflation is low, there will be an increase in aggregate demand.

Aggregate demand is the total of all goods and services produced during a period of time. If the prices rise, consumers tend to spend less money because the prices could keep rising and they are preparing for the future.

Dafna1 [17]2 years ago

6 0

A period of very low inflation would most likely lead to an increase in the aggregate demand in the economy.

Further explanation:

Implication of low inflation rate: A low inflation rate implies that the purchasing power of a specific amount of money rises. A very low inflation period will enable consumers to have a large basket of goods and services in exchange for a specific amount of money.

Effect of low inflation on the economy: A period of low inflation rate will turn into an increase in the aggregate demand in the economy. Since a low inflation rate in the economy provides benefits to the consumers in the form of increasing their purchasing power. Thus, the aggregate demand in the economy rises. People will demand number of goods and services as a result in order to take advantage of increased purchasing power.

Therefore, the measure of aggregate demand rises in the economy as a result of a period of low inflation.

Learn more:

1. Learn more about inflation and economy

brainly.com/question/3310349

2. Learn more about inflation

brainly.com/question/3370347

3. Learn more about the effect of inflation

brainly.com/question/2974782

Answer details:

Grade: Senior School

Subject: Economics

Chapter: Aggregate Demand and Aggregate Supply

Keywords: a period, of low inflation, would most, likely lead to, low inflation rate, the purchasing power of a specific amount of money rises, consumers can purchase, a large basket of goods and services, the advantage of increased purchasing power, effect of low inflationary period.

You might be interested in

Darrin’s employees are highly skilled, so he allows them free rein to do their jobs.

Oxana [17]

Answer::Leader-Member exchange , Out group members

Explanation:Leader-Member exchange theory is a relationship based theory of leadership that exists between the leading managers and their n employees together with their interaction with each other leading to a productive workplace environment for both individuals.

The created relationship can either succeed when there is trust and mutual respect leading to effective employees or fail by producing undesired result in terms of a hostile relationship leading to low efficiency and productivity from employees

According to the leader member exchange theory, leaders tend to create different relationships with followers by forming two groups----- in group members and out group members

of which the outgroup members are given less responsibilities with less attention and work outside the leaders inner circle of communication and therefore are less likely to engage in organizational citizenship than other employees.

4 0

3 years ago

Mullineaux Corporation has a target capital structure of 64 percent common stock, 9 percent preferred stock, and 27 percent debt

nlexa [21]

Answer:

10.02%

Explanation:

The computation of the WACC is shown below. The formula of WACC is shown below:

= (Weightage of debt × cost of debt) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)

= 27% × 7.6% × (1 - 0.40) + 9% × 5.9% + 64% × 12.9%

= 2.052% × (1 - 0.40) + 0.531% + 8.256%

= 10.02%

8 0

3 years ago

The internal rate of return (IRR) refers to the compound annual rate of return that a project generates based on its up-front co

Sav [38]

Answer:

The answer and procedures of the exercise are attached in the following archives.

Explanation:

Consider this explanation too

The IRR is the project’s expected rate of return, assuming that intermediate cash flows also earn the IRR. If this return exceeds the cost of the capital invested in the project, the excess value goes to the firm’s shareholders. Therefore, independent projects whose IRR is greater than the WACC should be accepted.

Therefore in this case WACC of the project is 7% and IRR of the project is 1.86% which is less than WACC of the project. Hence the firm reject the project delta.

Calculation of IRR is based on Cash inflows and outflows for the number of years so that increase in cost of capital will not affect IRR.

5 0

3 years ago

Suppose the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new j

SCORPION-xisa [38]

Answer:

The correct answer is C. If the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs more quickly. The policy will cause the natural rate of unemployment to fall, which will shift the long-run aggregate supply curve to the right .

Explanation:

Unemployment occurs when there is a greater supply of labor than what is demanded. This means that there are people who seek employment at the regular wage rates, but who are unable to get employment in the open labor market. Unemployment also means that people who actually want to work (and who are unemployed) cannot work with what they are qualified for.

Unemployment is a social problem, and low unemployment and high employment are important in order to develop and maintain a welfare society. For each individual, work is the most important insurance for their own welfare and social inclusion.

If the aforementioned law were approved, and the unemployed began to look for work imminently (even leaving aside some pretensions), many of them would get a job in a shorter time than if this law were not approved, which would decrease the country's unemployment rate.

6 0

3 years ago

Carolina City places an order for a specific item of equipment and encumbers $6,000 for that item. The equipment arrives with an

IceJOKER [234]

Answer:

Dont care about your questions

7 0

3 years ago