1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
pochemuha
3 years ago
12

Suppose consumption demand of GDP decreases during a recession while the other demands are unaffected. What happens to the equil

ibrium real interest rate in the economy?
Business
1 answer:
julsineya [31]3 years ago
7 0

Answer:

Since consumption represents almost 70% of the GDP, any change in consumption affects the economy more than any change in the rest of the components of the GDP (net exports, investment, government). If consumption decreases, then the real interest rate will decrease.

The higher the interest rate, the lower the consumption level. This should increase the savings = more investment in the economy, but since consumption is so important to the economy, a decrease in consumption will decrease the equilibrium interest rate. This lowering in the real interest rate will be carried out in order to try to increase consumption.

You might be interested in
Production Budget Pasadena Candle Inc. projected sales of 800,000 candles for January. The estimated January 1 inventory is 35,0
sergij07 [2.7K]

Answer and Explanation:

The preparation of the production budget is presented below:

Projected sales units 800,000 candles

Add: Desired ending inventory, Dec 31 20,000 units  

Total units available 820,000 units  

Less: Estimated beginning inventory,Jan 1 -35,000  units

Total units to be produced 785,000  units

We simply applied the below formula i.e

= Sales units + ending inventory units - beginning inventory units

By applying this formula we can get the Total units to be produced in January month

7 0
3 years ago
Bruce is a single father with 1 child. He can work as a bagger at the local grocery store for $6 per hour up to 1,200 hours per
serg [7]

Answer:

$16,440

Explanation:

If Bruce is able to work 600 hours per year, his salary will be $3,600 (= $6 x 600), but he will lose $2,160 (= $3,600 x 60%) of welfare stipend.

His total welfare stipend is $15,000 if he is not able to work during the year.

Bruce's total income = $15,000 + $3,600 - $2,160 = $16,440

4 0
3 years ago
On September 1, 2020, Windsor Company sold at 104 (plus accrued interest) 3,840 of its 8%, 10-year, $1,000 face value, nonconver
Rzqust [24]

Answer:

total sales value = 3,840 x $1,000 = $3,840,000 x 1.04 = $3,993,600

since each bond carried 2 detachable stock warrants, we must include in the bond issuance the value of the stock warrants = 3,840 bonds x 2 warrants x $2 per warrant = $15,360

the premium on bonds payable = total cash received - bonds payable - stock warrants = $3,993,600 - $3,840,000 - $15,360 = $138,240

the journal entry for recording the bond issuance:

September 1, 2020, 3,840 8% bonds issued

Dr Cash 3,993,600

    Cr Bonds payable 3,840,000

    Cr Premium on bonds payable 138,240

    Cr Additional paid in capital - warrants 15,360

5 0
3 years ago
Rights guaranteed by the First Amendment include _____.
WITCHER [35]
<span>D. all of these is correct</span>
7 0
3 years ago
Read 2 more answers
Which of the following is a characteristic of a partnership? a.The partners have limited liability. b.The partnership is subject
Ulleksa [173]

Answer:

The correct answer is letter "C": The partnership has a limited life.

Explanation:

A partnership is an organization with two or more members running a business. They share the profits in percentage terms in proportion to their partnership value. There are two types of partnerships: general partnerships (<em>unlimited liability</em>) and limited partnerships (<em>liability proportional to the contribution to the partnership</em>).

The partnership dissolves and a new partnership is created when one of the partners is removed, retired or deceased or even when a new partner is introduced. Thus, <em>partnerships have a limited life</em>.

8 0
3 years ago
Other questions:
  • As the percentage of the consumer's income accounted for by a particular good decreases, demand for the good will:
    15·1 answer
  • Roadtec Tire Company has a corporate culture that emphasizes an internal focus on the involvement and participation of employees
    10·1 answer
  • •Determine strategies that can be used to develop effective groups and teams
    5·1 answer
  • The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this
    12·1 answer
  • Dorothy Crusher is a licensed CPA. During the first month of operations of her business (a sole proprietorship), the following e
    11·1 answer
  • Which of the following situations may qualify a taxpayer to claim an education credit on their tax return? g
    7·1 answer
  • Timothy is planning the pricing strategy for his company’s products. He is directed by the management to add a premium (amount a
    12·1 answer
  • If the government places a $2 tax per bag of potato chips on the producers, what would the consumers of potato chips observe? a.
    8·1 answer
  • Click this link to view O*NET's Work Activities section for Reporters and Correspondents.
    13·2 answers
  • Supports the incident action planning process by tracking resources, collecting/analyzing information, and maintaining documenta
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!