A favorable supply shock is a sudden increase in supply that makes the short-run aggregate supply curve (SRAS) shift to the right, average price levels go down and real GDP also shifts to the right. In this case, average price levels go down as shown in the figure below from p1 to p2 SRAS shifts right.
This may make create deflation in an economy and discourage new producers to enter the market, to bring back inflation, the central bank may reduce interest rates and decrease the money supply in the market, and in short, will follow expansionary monetary policy. This will make people demand more and hence as aggregate demand shifts to correct average price levels may again go up. This move will create new jobs in the market as aggregate demand will increase in the short term.
A supply shock is an event that causes unexpected cost increases or production disruptions. This shifts the short-run aggregate supply curve to the left, boosting inflation and lowering real domestic production.
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Answer:
Multiple choices below are missing:
A) purchase Bond A
B) purchase Bond B
C) purchase neither A nor B at this time
D) negotiate a higher rate on Bond A
The correct option is A,purchase bond A.
Explanation:
By purchasing Bond A,Lee is assured interest payment of 7.5% for a period of twenty years,hence the issuer cannot call the bond if interest rate drops by 2% in order to issue a lower interest-bearing bond which would be cheaper cost-wise.
However, if Lee purchases Bond B with current coupon of 8.25%,the interest is only guaranteed for a period of two years,since the issuer has the prerogative of calling back the bond after two years should interest fall in order to issue another bond that commands lower interest rate.
Answer:
27.42 m/s
Explanation:
Data provided in the question:
Distance traveled on a straight track = 0.754 km
Time taken to cover while going = 25.0 s
Time taken for the return = 30.0 s
Now,
Total distance covered = 2 × 0.754
= 1.508 Km
= 1508 m
Total time taken = 25 + 30 = 55 s
Therefore,
The average velocity of the car = Total distance ÷ Total time
= 1508 ÷ 55
= 27.42 m/s
Answer: D) Cost per unit
Explanation:
In terms of manufacturing field, where the goods are manufactured, service operation is the process which workers manage and control demand of customers after getting training from operation manager.
Cost per unit is not the factor that acts as differing agent between manufacturing process and service operation because it is a part of the process which is handled by workers .
Other options are incorrect because transportation, contact of customer and resale are the factors that contrast the manufacturing service and service operations.Thus, the correct option is option(D)
Answer:
c. Waiver of Premium
Explanation:
A waiver of premium is clause in an insurance contract in which the insurance company promises not to oblige the insurer to pay a fee to maintain the contract in some extraordinary cases: these cases are usually either disability or death.
Because in the case of this question the insured is concerned about becoming disable and losing the ability to pay for the contract, he is likely to benefit from a waiver of premium included in his insurance contract.
