Answer and Explanation:
Long-term Liabilities
Bonds Payable $600,000
Less:
Discount on bonds payable $45,000 $555,000
Notes payable $80,000
Total Long-term Liabilities $635,000
When the economy is not at full employment and an expansionary monetary policy is followed:
- Interest rates decrease
- Investment spending increases
When there is an expansionary monetary policy in place, more money is pumped into the economy which means that there are more loanable funds. This increase in the supply of loanable funds will decrease the interest associated with them.
As a result of interest rates being lower, more businesses and people will be able to borrow money and invest in projects thereby increasing investment spending.
In conclusion, there will be an increase in investment spending due to a decrease in interest rates.
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Answer:
It helps giving you the ability to choose what you think is best for your business
Explanation:
Vic, using the money tree metaphor is awesome in order to explain. Think about your free enterprise (let’s say… a store that sells trees!).
What you need in order to start and run a business? A place to sell those trees, employees, products, infrastructure, etc., and capital to fund all that. All that business plans and models that you will develop in order to have a successful business will require that you make economic decisions, actions. And, in order to make those decisions, you need economic liberty, which is exactly the ability one has to make economic decisions without political, economic or social blocks.
Imagine that in your region you can only sell trees with red leaves, or your trees are taxed much more than trees coming from overseas, or that employment law requires that no employee gets near a plant (who knows, it could be to prevent allergic season!). That would make super hard to develop your business right?
That’s how economic liberty could help you grow your money tree; into giving you the ability to choose what you think is best for your business.
Answer:
The total amount of interest paid on all three loans is 8,748.
Explanation:
Each person has borrowed 5,000 for the same period and with the same interest rate. However, the repayment is made differently by each person.
We calculate the interest paid by each person, and then sum up the three interest payments.
Seth pays = [5000 x (1 + 0.12/2)^10] - 5000 = 3,954
Janice pays = 5,000 X 0.06 x 10 = 3,000
Lori pays = [(5,000 x 10) / 7.36] - 5,000 = 1,794
Total interest payment = 3,954 + 3,000 + 1,794 = 8,748