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Mama L [17]
2 years ago
14

Suppose monetary neutrality holds and velocity is constant. A 5 percent increase in the money supply increases the price level b

y less than 5 percent. increases the price level by more than 5 percent. increases the price level by 5 percent. does not change the price level.
Business
1 answer:
Alex73 [517]2 years ago
4 0

Answer:  Increases the price level by 5 percent

Explanation:

Monetary Neutrality is a theory in Economics that posits that when there is a change in money supply in an economy, the only variables affected are the nominal ones like price level and wages and Real variables like GDP and employment are not affected.

It holds that when there is an increase in money supply, there is an equivalent increase in Price level as well because the value of money has fallen by the rate of the monetary increase. The Price level rising at the same rate is to compensate.

A 5 percent increase in the money supply will therefore increase the price level by 5 percent.

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Answer:

Zero balance

Explanation:

Because you finished all your money.

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The person who receives financial protection from a life insurance plan is called
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4 0
3 years ago
(Ignore income taxes in this problem.) Alesi Corporation is considering purchasing a machine that would cost $283,850 and have a
gavmur [86]

Answer:

(A) Payback period for the machine= 3.5 years

(B) Simple rate of return for the machine= 87.5%

Explanation:

Alesu corporation is considering purchasing a machine that would cost $283,850

The useful life is 5 years

The machine would reduce cash operating costs by $81,100 per year

The salvage value is $107,100

(A) The payback period for the machine can be calculated as follows

= cost/amount of cash flow

= 283,850/81,100

= 3.5 years

(B) The simple rate of return for the machine can be calculated as follows

First we calculate the depreciation expense

= 283,850-107,100/5

= 176,750/5

= 35,350

Annual incremental income= cost savings -depreciation expenses

= 283,850-35,350

= 248,500

Simple rate of return = annual incremental income/cost × 100

= 248,500/283,850 × 100

= 0.875 × 100

= 87.5%

3 0
3 years ago
International Food Services (IFS) has a contract with the Marines to supply meals for its troops in Afghanistan and other foreig
andrezito [222]

Answer:

C, the board of directors of IFS

Explanation:

The board of the IFS is ultimately responsible for the corporate climate that resulted in the use of substandard ingredients in the meals meant for the troops.

This is because the directors are the ones at the helm of affairs and they decide what happens in the IFS. This means that at least one of the directors is aware of the use of substandard ingredients . It can be said that if one knows, all other know. This phrase convieniently indicts the directors.

Cheers.

4 0
2 years ago
Assume the lunch plate industry in Oahu, a perfectly competitive industry, is in long-run equilibrium with a market price of $5.
Wewaii [24]

Answer:

Explanation:

The lunch plate industry in Oahu is a perfectly competitive industry.  

This industry is also a decreasing cost industry. A decreasing cost industry can be defined as the type of industry where an increase in the number of firms in the industry causes the average production cost to decline.  

The industry is currently in long-run equilibrium and has the price level at $5.

As the demand increases, the price level will initially increase. But this increase in the price will cause the profits to increase and thus attract potential firms to join the market.  

As the number of firms increases the average cost of production will decrease. As a result, the supply in the market will increase more than the demand.  

So the long-run equilibrium will be reestablished at a lower price than earlier.

7 0
2 years ago
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