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algol [13]
2 years ago
9

Each statement below is part of an economic model. Indicate whether the statement is a prediction of cause and effect or an assu

mption.
a. People behave rationally: __ .
b. If the price of a good falls, people will consume more of that good: __ .
c. Mass starvation will occur as population outgrows the food supply: __.
d. Firms want to maximize profits:___ .
Business
2 answers:
Brilliant_brown [7]2 years ago
7 0

Answer: Please refer to answer.

Explanation:

An Assumption in Economics is a condition that is necessary for Economic theory to be founded upon. You could call them SIMPLIFYING conditions as they make the Theory easier to understand.

Cause and Effect I hope and believe is self explanatory.

a. People behave rationally: ASSUMPTION.

This is a basic Assumption in Economics that helps to explain why and how Individuals react to certain things.

b. If the price of a good falls, people will consume more of that good: CAUSE AND EFFECT

People consume more goods (effect) when prices fall (cause).

c. Mass starvation will occur as population outgrows the food supply: CAUSE AND EFFECT .

Mass Starvation will occur (effect) if the population outgrows food(cause).

d. Firms want to maximize profits: ASSUMPTION.

This is another Economic Assumption that attempts to explain why firms act in a certain way.

aivan3 [116]2 years ago
4 0

Answer:

(a) Assumption

(b) Cause and Effect

(c) Cause and effect

(d) Assumption

Explanation:

(a)  People behave rationally: Assumption

Rational behavior refers to a decision-making process that is based on making assumptions that result in an optimal level of benefit or utility.

(b) Cause and Effect

If a price of goods falls that is a cause and the effect is that  people will consume more of the good.

(c) Cause and effect

As the population grows faster than food supply (cause), mass starvation is predicted to occur which is the resultant effect.

(d) Assumption

The maximization of profit is based on the assumption of theory of production and costs.

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6. Bronco Co. is a U.S.-based MNC that has subsidiaries in Spain and Germany. Both subsidiaries frequently remit their earnings
Hatshy [7]

Answer:

Cash outflow of $579,500

Explanation:

Net cash flow is the sum of all cash inflow and outflows of the company.

In this question the company has cash outflow from Spain and inflow from Germany.

As per given data

Cash flow from Spain subsidiary = €5,000,000 outflow

Cash flow from German subsidiary = €4,500,000 inflow

Net cash flow to parent company = - €5,000,000 + €4,500,000

Net cash flow to parent company = - €500,000

The currency is converted using the exchange rate of $1.159 per euro.

Net cash Flow in U.S. dollars = - €500,000 x  $1.159 per euro

Net cash Flow in U.S. dollars = - $579,500

3 0
3 years ago
If the company were to issue an annual zero-coupon bond with a maturity of 2 years and par value of $1,000, what would be the ar
Firdavs [7]

Answer:

Note: <em>The complete question is attached as picture below</em>

1a. The one year spot rate can be calculated using the one year zero bond.

PV * (1 + S1) = FV

1 + S1 = 1000 / 900

S1 = 1.1111 - 1

S1 = 0.1111  

S1 = 11.11%

1b. PV of the 2 year bond = $950

Annual coupon = 1000 * 5% = $50

950 = 50 / (1 + S1) + (50 + 1000) / (1 + S2)^2

950 = 50 / 1.1111 + 1,050 / (1 + S2)^2

1,050/ (1 + S2)^2 = 950 - 45 = 905

(1 + S2)^2 = 1050 / 905

1 + S2 = 1.160221/2

S2 = 7.714%

1c. Price of the 2 year zero bond = 1,000 / (1 + 0.07714)^2

Price of the 2 year zero bond = 1,000 / 1.1602

Price of the 2 year zero bond = 861.9203586

Price of the 2 year zero bond = $861.92

3 0
3 years ago
On January 1, 2018, Moore, a fast-food company, had a balance in its Cash account of $54,000. During the 2018 accounting period,
7nadin3 [17]

Answer:

Net cash flow as at the year end=          $22,100

Explanation:

The statement of cash flows for Moore shall be calculated as follows:

Cash balance as at January 1, 2018=     $54,000

Cash inflow from operating activities=  $35,600

Cash outflow from investing activities= ($43,000)

Cash outflow from financing activities= ($24,500)

Net cash flow as at the year end=          $22,100

4 0
3 years ago
The greater the value of the marginal propensity to consume A. the greater the value of autonomous consumption. B. the greater t
just olya [345]

Answer:

C. the greater the value of the multiplier

Explanation:

As we know that

The formula to compute the Government spending multiplier is shown below:

Government spending multiplier = 1 ÷ (1 - marginal propensity to consume)

where,

Marginal propensity to consume refers to the change in consumption with regard to the change in income

So if the value of the marginal propensity to consume is higher than there would also increase in the value of the multiplier and in the same proportion it would be greater

4 0
3 years ago
Read 2 more answers
A customer asks you over the phone how much it will cost to upgrade memory on her desktop system to 16 GB. She is a capable Wind
tangare [24]

Answer:

She will be required to use the BIOS/UEFI to check the memory slots available and how much memory on the slots have been used up.

Explanation:

The reason why she'd be asked to perform the above task of checking which slots are avalable is so as to determine how much memeory will be bought to add to the existing one ad so as to be able to determine the price of the needed memory.

cheers.

7 0
2 years ago
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