The real interest rate tells you how fast the purchasing power of your bank account rises over time.
<h3>What is meant by the real interest rate?</h3>
- When a borrower pays back a loan with interest, the lender obtains a gain in purchasing power that is expressed as a percentage.
- In the previous illustration, the lender made $8 on the $100 loan, or 8%.
<h3>What is real and nominal interest rate?</h3>
- The real rate of a bond or loan is determined by adjusting a real interest rate to account for the impacts of inflation.
- The interest rate before accounting for inflation is referred to as a nominal interest rate.
<h3>Why real interest rate is important?</h3>
- Real interest rates are the main concern of economists.
- Investors may be forced to take on greater risk or withdraw entirely depending on the real rate.
- Without ever taking a dollar, it can drain your savings.
- Every central bank in the world has it on their radar.
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Answer:
A higher operating income will result under absorption costing
Explanation:
If manufacturing production exceeds units sold there will be an increase in inventory and increases in inventory cause income to be higher under absorption costing than under variable costing.
Under variable costing, as its name suggests, only variable production costs are assigned to inventory and cost of goods sold.
Under absorption costing, normal manufacturing costs are considered product costs and included in inventory.
<em>Recognize that a reduction in inventory during a period will cause the opposite effect. </em>
<em>Specifically, a portion of the contents of the beginning inventory would be transferred to expense commensurate with the decrease in inventory. </em>
<em>Since the inventory contains less under variable costing, expect expenses to be lower and income to be higher.</em>
<span>Holly would want to run a parallel test. In this, she would be able to utilize the processing capability at some third-party location while still being able to use all of her own technical resources and not expending any of her own on-site. The activity at her center would not be lowered and would still be able to give the results she requires.</span>
Answer:
profit = 250,000
Explanation:
Factor Income is derived from the sum of the Factor of Production
Labor, Land, Capital and Enterprise
Income = wages + rent + interest + profit
To get profit, which is the retribution for the entrepreneur we post our know values and solve for p.
5,000,000 = 3,500,000 wages + 1,000,000 rent + 250,000 interest + p
5,000,000 - 3,500,000 - 1,000,000 - 250,000 = p
p = 250,000
Because of the principles of Keynesianism, the entire new deal was founded on the concept of deficit spending to stimulate the economy and end the depression.
Keynesians contend that because prices are somewhat rigid, changes in any aspect of spending, including government, investment, or consumer spending, affect output. According to Keynesian economics, a healthy economy spends or invests more than it saves and that demand drives supply. Keynes believed that governments should increase spending even if it means going into debt in order to generate jobs and increase consumer purchasing power during a recession. Deficit spending is when the federal budget deficit for a given year is calculated as the difference between the federal government's outlays (also known as outlays) and its tax revenue (also known as revenue). An annual surplus rather than a deficit occurs when the government raises more money than it spends.
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