1.
The cause of a surplus is when quantity that are
produced are not equivalent with the demanded quantity and by this, there is
likely an effect of the supply or demand to be in excess, creating surplus.
2.
It can be quickly resolved if the quantity
produced is as equal with demand quantity.
3.
The determinants of inelastic demand are the
following;
<span>·
</span>Categories of product
<span>·
</span>Substitutes (few)
<span>·
</span>Less time given
<span>·
</span>Necessities
<span> </span>
Answer:
nominal, real, & the classical dichotomy
Explanation:
A nominal variable is a value whose values are non-numeric for example gender. It is calculated based on the current – year prices.
In other words, nominal value is calculated in monetary terms, whereas real value is measured on the basis of goods or services
A real variable is a variable whose values are numeric. It is measured based on the currency of the base year.
The distinction between real variables and nominal variables is known as <u>nominal, real, & the classical dichotomy</u>.
The Classical Dichotomy is based on the assumption that states that in the long run, the nominal economy and the real economy are completely separated from each other. In the long run, nominal prices have no impacts on real variables.
The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.
Explanation:
If demand falls and supply declines, the quantity of balance may decline, and the price of balance can increase, decline, or stay the same. If demand declines and output stays the same, the quantity of balance declines and the price of balance decreases.
Decreased demand and decreased production could contribute to a decrease in the price of balance, but the impact on the quantity of balance can not be calculated.
Consumers often put a lower premium on the product for every amount, so suppliers are able to tolerate a lower demand; thus, the output should decline.
A banker's acceptance is the payment guaranteed by a bank for a time draft that is payable to a seller of the goods.
A banker's acceptance is a short-term investment plan that is created by a company or firm with a guarantee from a bank. It is important that the company or firm is a non-financial firm. It is a guarantee that the bank gives that a buyer will pay the seller the amount at a future date. A good rating is a prerequisite for obtaining the banker's acceptance.
This is very useful, especially during foreign trade. During foreign trade, the creditworthiness of the importer is not known. The period of the banker's acceptance is usually lesser than 180 days. These acceptances are traded at discounts from the face value in the secondary markets. So, the banker's acceptance acts as a negotiable time draft.
This guarantee from the bank is a written promise by the bank to the seller to pay the sum specified if the buyer is not able to do so. This promise is backed by the bank so the seller feels confident in exporting his goods. As it is safe and liquid, the return on the banker's acceptance is low.
Learn more about banker's acceptance here:
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Answer:
$74.61
Explanation:
The computation of the value of preferred stock is shown below:
Value of preferred stock = Annual dividend ÷ return of preferred stock per share
= 10.40% × 100 ÷ 13.94%
= $74.61
Simply we divide the annual dividend by the value of preferred stock per share so that the correct value of preferred stock can be computed
