Answer:
equal to the british interest rate
Explanation:
Data provided in the question
The Interest rate on these securities = 12%
In the U.S, the interest rate = 10%
Also the spot rate for today would become suitable for the spot rate
Based on the above information, the effective yield on the british securities would be equivalent to the british interest rate and hence the same is to be considered
Answer:
A. I and III
Explanation:
Capital gains on the municipal securities are taxable at the Federal, State and Local Level. Only the interest income from the municipal securities will be exempted from the Federal income tax.
Answer:
It does not consider all the unemployed people.
Explanation:
The unemployment rate is a percent expression of the jobless labor force in an economy. In calculating the unemployment rate, the bureau of labor statistics considers only the unemployed people who have been actively seeking work in the past four weeks.
Due to this reason, the unemployment rate does not include all the jobless people in the country. Unemployed individuals who have lost hope of finding work, and those who did seek employment get excluded. Those engaged in other chores like caring for the sick or the elderly are also not considered.
To control the supply of money to help stabilize the economy
Explanation:
An increase in the supply of money works both through lowering interest rates, which spurs investment, and through putting more money in the hands of consumers, making them feel wealthier, and this stimulates spending.
Answer:
a. 1, 5 and 7
b. Resources will be allocated inefficiently
c. Differing sizes and capacities
d. Benefits due to economies of scale
e. Reduce prices and improve resource allocation.
Explanation:
The correct combination is 1, 5 and 7. The price of a pure monopoly firm is much higher than that of purely competitive firm because the later is a price taker while the former is a price fixer. Because of this, output of monopoly is lower while the profit margin is higher than that of competitive firm.
Assuming that a pure monopolist and a purely competitive firm have the same unit costs. In the case of a pure monopolist, resources will be allocated inefficiently because the monopolist does not produce at the point of minimum Average Total Cost and does not equate price and Marginal cost.
Even though both monopolists and competitive firms follow the MC = MR rule in maximizing profits, there are differences in the economic outcomes because pure competitors lack capacity and are smaller in size while the monopolist has the capacity to expand inorder to maximize profits.
The costs of a purely competitive firm and a monopoly may be different because the monopolist is capable of taking advantage of cost reduction arising from economics of scale. Pure competitors does not experience economies of scale due to their small sizes.
If a monopoly can experience economies of scale, it can reduce prices beyond that of the pure competitor thereby ensuring a more efficient resource allocation.
