Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 66,00
0 units of RX5 follows. Direct materials$5.00 Direct labor 9.00 Overhead 10.00 Total costs per unit 24.00 Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 66,000 units of RX5 for $19.00 per unit. Required: 1. Calculate the incremental costs of making and buying component RX5.
1 answer:
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Answer:
shift demand and supply for loanable funds to the right (up), increasing interest rates.
Explanation:
According to the Fisher hypothesis when there is an increase in the expected inflation there is an equal increase in nominal interest rates.
As interest rates rise demand and supply for loanable funds will rise. This is illustrated in the attached diagram. Interest rate moves from i0 to i1.
Inflation is a reduction in the purchasing power of money. When inflation increases money regulation agencies reduce supply of money as a way to reduce price increase. This in turn reduces the amount of loanable funds commercial banks have to give out
