Answer: The supply of money increases and so aggregate demand shifts right.
Explanation: When the Federal Government buy Bond they help to increase the amount of money available for the Banks to loan to Business entities, Organisations and individuals.
The Aggregate Demand will Shift to the right, signaling the Increase in the rate of Demand as a result of the Increase in the volume of Money in circulation within the Economy. Once consumers have money to spend or invest they will cause the Demand for goods and services to increase.
The answer would be the stock price will decrease. The reason behind this is the original price replicates an expectation or looking forward of a 25% upsurge in the company’s earnings. The actual increase is a dissatisfaction compared to original expectations.
Answer:
January 1, 2020
Bonds Payable 1600000 Dr
Loss on Redemption of bonds 36800 Cr
Discount on Bonds Payable 4800 Cr
Cash 1632000 Cr
Explanation:
The redemption of bonds before the maturity usually requires a payment for redemption which is a certain percentage of its face value. It is usually higher than the face value. The above bonds are redeemed at 102 which means at 102% of the face value of the bonds. Thus, the cash paid to redeem the bonds is,
Cash = 1600000 * 102% = 1632000
The bonds have a carrying value, which is the face value less discount or add premium, of,
Carrying value = 1600000 - 4800 = $1595200
If they are redeemed for an amount in excess of the carrying value, they are redeemed at a loss.
The loss on redemption is,
Loss = 1595200 - 1632000 = $36800
Answer:
This implies that bus is an inferior good and car is a normal good.
Explanation:
Initially, Jim's income was $5000 a year.
As his income increases to $60,000 a year, he decides to buy a car instead of using the bus.
In other words, with the increase in income, the demand for traveling by bus is declining.
This implies that it is an inferior good.
The demand for the car is increasing with an increase in income.
So, the car is a normal good.
An inferior good can be defined as a product that shows negative elasticity. This means with an increase in income its demand declines an vice versa.
A normal good can be defined as a product that shows positive income elasticity. That is, its demand increases with rise in income and vice versa.
