Answer:
- <u><em>d) increases as the interest rate decreases.</em></u>
Explanation:
<em>Present value</em> is the value today; future value is the value some time in the future.
The mere notion of the value of money in time should tell you that, further away in time (towards the future) a sum of money is found, the lower its value today.
Then, you should be able to rule out some propositions that are contrary to that intuition:
- a<em>) decreases as the time period decreases</em> ↔ clearly false: the present value increases as the time period decreases
- <em>e) is directly related to the time period</em>. ↔ clearly false: the present value is inversely related to the time period.
How is the present value related to the future value?
They are directly related: the higher a lump sum in the future the higher the value of it in the present; more money is more money always. More money in the future has more value in the present; less money in the future has less value in the present. Thus, the option <em>b). is inversely related to the future value</em> is false
How is the present value related to the interest rate?. Which one is true?
- c) is directly related to the interest rate, or
- d) increases as the interest rate decreases
The present value is calculated discounted the future value at the interest rate. The interest rate is in the denominator of the equation to pass from future value to present value. Thus, they are inversely related (c is false); the less the interest rate, the higher the present value of a future amount (confirm d is true).
Therefore, the correct answer is that <em>the present of a lump sum future amount: </em><em><u>d) increases as the interest rate decreases.</u></em>
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Answer: Automatic stabilizers
Explanation:
The automatic stabilizers are one of the type of fiscal policy that which are design for the economical fluctuation. It is mainly authorized by the government and also by the policy makers.
The automatic stabilizer is also known as the economical policy and the activity is done without any government intervention. In this system, the income and taxes are get decreased or increased in the business cycle.
Therefore, Automatic stabilizers is the correct answer.
Answer:
$60000
Explanation:
Given: Sales = $300000.
Cost of goods available for sale= $270000.
The gross profit ratio= 30%
First finding the gross profit out of total sales.
Gross profit= 
Gross profit= 
∴ Cost of goods sold= 
Cost of goods sold= 
Cost of goods sold= 
Hence, cost of goods sold=
Now, finding estimated cost of the ending inventory.
Cost of ending inventory= 
⇒ Cost of ending inventory= 
∴ Cost of ending inventory= 
Hence, estimated cost of the ending inventory under the gross profit method would be $60000.
Answer:
The correct answer is a).
Explanation:
The income elasticity of demand refers to the percentual variation of quantity demanded of a certaing good in response to a percentual variation in income.
If the income elasticity of demand for medical care is 1.35,
<em>a. if income decreases by 1%, the quantity demanded for medical care decreases by 1.35%.</em> TRUE, this is what the definition implies.
<em>b. if the price of medical care increases by 1%, the quantity demanded for medical care decreases by 1.35%. </em>FALSE. In this elasticity, the sign is relevant. This income elasticity implies that changes in income and medical care expenses have the same sign.
<em>c. if the income of the average consumer increases by 1 dollar, the quantity demanded for medical care will increase by 1.35 units of care.</em> FALSE. The elasticity relates percentual variations, not absolute value variations.
<em>d. if income increases by 1%, the quantity demanded for medical care decreases by 1.35%.</em> FALSE. The same as point b.
Answer:
A. The number of houses that an individual owns
Explanation:
The use of normal distribution in option A would produce an error. That is the number of houses individuals own.
We know that people can own 1 house or more than 1 house or no house at all. But a person can never be said to have less than 0 houses.
Option a is going to be skewed positively. Using Normal distribution would give us an error.
